Sunrise Senior Living of McLean has agreed to be acquired by Health Care REIT, an Ohio-based health-care property owner, in an all-cash deal worth $845 million.
The $14.50-per-share purchase price was a 62 percent premium above Sunrise’s price at the close of business Tuesday.
The deal, which both sides announced Wednesday morning, is expected to close in the first half of 2013 and is subject to shareholder approval.
Sunrise, which veered toward the edge of bankruptcy after an accounting scandal, only to shed millions of dollars’ worth of assets during a turnaround, manages more than 300 facilities in the United States, Canada and Britain. The company owns 20 senior communities outright and has interests in 105 others, in addition to the ones it manages.
Many of its properties are on the East Coast between Boston and Washington.
The sale closes a chapter on a story that began 31 years ago, when Sunrise founders Paul and Terry Klaassen started the company’s first residential-based senior living community off Glebe Road in Arlington County, one of the first of its kind.
“We’re very proud of this transaction and what it says about the strength of Sunrise and the accomplishments of our people,” said Sunrise chief executive Mark Ordan, who was brought in to save the company in 2008. “Paul and Terry’s mission has been, and will continue to be, the foundation of Sunrise for years to come.”
Sunrise manages or owns more than 25 communities in the Washington area, and it employs several thousand people, including more than 300 at its McLean headquarters.
An accounting scandal in 2006 and 2007 prompted a Securities and Exchange Commission probe, resulting in restatements that reduced earnings. The stock price plunged.
After taking over Sunrise, Ordan recruited new staff members, including a new chief investment officer, head of information technology and head of human resources. He sold off properties to reduce overhead. The company’s real estate development team shrank from 100 to three people. Corporate credit cards were reduced; Ordan even cut the free Starbucks coffee at headquarters.
Ordan eventually cut costs and grew revenue enough to stabilize the company and fend off bankruptcy. The company produced operating profits, but it lost money over the past few years because of asset sales and writedowns.
“Health Care REIT has indicated its intention to see Sunrise continue as a strong and growing independent company,” Ordan said. By selling itself to a REIT, which under law cannot both own and operate its real estate, Sunrise is likely to continue to be an independent operator based near Washington.
Ordan said he plans to remain with the company as its new chief executive.