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Sunrise Senior Living Inc. Message Board

  • zoomlik zoomlik Oct 22, 2009 9:30 PM Flag

    Has anyone calculated SRZ assets per

    its recent sale to BKD?

    The press states a total of 1,389 units for $204M [which is approx. $150k per unit]

    1- Last quarter says # of consolidated communities was approx 8000 (excluding Germany?).

    3- They also have 30,000 units in JV. Anyone knows the % ownership?

    assets should be then be worth

    (8000 + 30,000*%ownership)*150k

    with avg 10% ownership = $1.6B
    with avg 20% ownership = $2.1B
    with avg 30% ownership = $2.5B

    total debt is about $1.1B minus proceeds from German sale as i do not think assets included anything there

    Also does SRZ brand name has any intangible value? is it a trusted name?

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    • There is also about $300M of cash, long term investment and net receivable that I forgot to include in the assets. So, here is the updated

      assets should be then be worth

      $300M + (8000 + 30,000*%ownership)*150k

      with avg 10% ownership = $1.9B
      with avg 20% ownership = $2.4B
      with avg 30% ownership = $2.8B

      total debt is about $1.1B minus proceeds from German sale as i do not think assets included anything there

      Also does SRZ brand name has any intangible value? is it a trusted name?

      • 1 Reply to zoomlik
      • When they sold the 21 wholly-owned communities, their total number of communities dropped from 69 to 48. If 21 were sold for $205 million, I think it's safe to assume that the other 48 are worth around $500 million.
        Some of their communities are structured as 20% JV, while others are only 10%. However, if we look at the scenario where SRZ fails and needs to monetize these investments, I would look at a conservative scenario where half of the communities are 20% JV and the other half are 10%. Effectively, you could say that they have 15% ownership in 348 communities = theoretical 100% ownership of 52 communities.
        So, in total SRZ has 121 communities where it has theoretical 100% interest. That would put the value of those to $1.2-1.3bn and with a total debt of $615 million and $37 million of cash. Equity would be around $672 million or $13.17 per share.
        Now, this back of the envelope analysis asumes that Sunrise would have to sell all cash-yielding assets and close down. It doesn't look like the company is going BK anymore, so I would also include the cash that they are generating as management fee, which is based on revenues and NOI. If you take this into consideration, the value of SRZ jumps quite significantly (it's another $100 million of fees per year).
        Hope this helps