THE BUSINESS MODEL
The senior living industry is highly fragmented and lends itself to a national “buy and build” or consolidation strategy. Management believes that a large pool of prospective acquisitions exists offering substantial opportunity for an emerging growth public company.
This consolidation model is ideally suited for the senior living industry due to significant fragmentation coupled to the increasing demand of a broad spectrum of senior living needs. In the current market, transaction activity remains high and management believes relative valuations remain attractive through for the foreseeable future.
Significant transaction activity has increased in the senior living sector. 2017 experienced record deal volume with hundreds of announced transactions - up 15% from 2016 - supported by a strengthening economy which boosted operating performance, capital availability and the low interest rate environment. M&A spend totaled $10.9 billion, up 19% over 2014, which was $8.9 billion. While 2013 was a record setting year, 2014 was even more robust with $17.4 billion on more than 500 transactions.
With an objective of $250 million in annualized revenues within the first 5 years, the Company will initiate a comprehensive program to develop a robust pipeline of prospective acquisitions. Management has significant capital markets experience to drive a highly proactive M&A process calling for identifying, evaluating and acquiring prospective target operating companies. As an integral part of that process, the Company is commencing a program to execute buy-side agreements with certain M&A advisers, consultants and brokers to assist management in identifying and evaluating prospective target operating companies.