Welltower has entered into a significant agreement to acquire the entire portfolio of Amica Senior Lifestyles, focusing on luxury senior living properties across Canada. This acquisition is part of a broader initiative to capitalize on the growing demand for high-quality senior housing, and it comes at a substantial price tag of C$4.6 billion (approximately $3.19 billion).
The transaction includes 38 ultra-luxury senior housing communities and nine additional development sites, reflecting Welltower’s push to expand its footprint in the senior living market. The deal encompasses a 31-property existing portfolio that alone is valued at C$3.2 billion. In addition, Welltower will obtain seven properties that are still under construction, which are expected to reach completion between 2025 and 2027.
This strategic move is not just a purchase—it signifies a commitment to enhancing the quality of senior living options available. Regulatory approval is required before the deal can finalize, which is projected to occur in the fourth quarter of the fiscal year. Upon completion, Welltower is set to take on approximately CA$560 million in debt insured by the Canada Mortgage and Housing Corporation, further illustrating the scale of their investment in this sector. Shankh Mitra, Chief Executive Officer of Welltower, expressed his enthusiasm about this acquisition.
In a detailed statement, he noted, 'We are delighted to announce the acquisition of the Amica portfolio. Given the rapidly increasing demand coupled with a scarcity of new supply in the market, we anticipate that this portfolio will significantly enhance our revenue and cash flow growth in the forthcoming years.' Moreover, this acquisition is coupled with the establishment of a strategic partnership with Amica, wherein Welltower will also secure a minority interest in the management company of Amica.
Notably, Amica's management team will retain the majority of their stakes in the company, indicating a collaborative future. Jens Cermak, the CEO of Amica, affirmed the synergy between the two companies, stating, 'We also believe that we will be key beneficiaries of Welltower's industry-leading data science capabilities, which will help scale our platform.
Our portfolio has witnessed exceptional growth in recent years, and we strongly believe that this momentum can be sustained well into the future.' Looking back at the investment history, Ontario Teachers' Pension Plan made its first platform investment in Amica back in 2010. Terry Woodward, the senior managing director of private capital for Ontario Teachers', remarked, 'For over a decade, we have supported the company’s management team as they have grown the platform.
We are excited to watch the company reach new heights in the future.' Last month marked a notable achievement for Welltower as they reported an increase in normalized funds from operations, posting $1.13 per share, compared to $0.96 per share from the previous year. Additionally, revenue surged to $2.25 billion from $1.75 billion.
Looking forward, the company anticipates normalized FFO to range between $4.79 to $4.95 per share in 2025..