MARKHAM, Ontario, Aug. 12, 2024 (GLOBE NEWSWIRE) — Sienna Senior Living Inc. (“Sienna” or the “Company”) (TSX:SIA) announced today the launch of a $125 million equity offering, on a bought deal basis.
Sienna has entered into an agreement with a syndicate of underwriters (the “Underwriters”) led by TD Securities Inc., as sole bookrunner, under which the Underwriters have agreed to buy, on a bought deal basis, 8,340,000 common shares of the Company (the “Common Shares”) at a price of $15.00 per Common Share (the “Offering Price”) for total gross proceeds of approximately $125 million (the “Offering”). The Company has also granted the Underwriters an over-allotment option to purchase up to an additional 1,251,000 Common Shares at the Offering Price, exercisable in whole or in part, for a period of 30 days following closing of the Offering (the “Over-Allotment Option”). If the Over-Allotment Option is exercised in full, the gross proceeds to the Company will be approximately $144 million.
Sienna intends to use the net proceeds of the Offering, together with any net proceeds from the Over-Allotment Option, (i) to fund the approximately $15 million equity purchase price for the Company’s previously announced acquisition of the remaining 30% ownership interest in Nicola Lodge (the “Nicola Lodge Acquisition”), a 256-bed best-in-class long-term care community in Port Coquitlam, British Columbia; and (ii) for general corporate purposes, which primarily include financing strategic growth initiatives including previously announced long-term care (“LTC”) developments and future acquisition opportunities.
The Nicola Lodge Acquisition will provide Sienna with full ownership of a high-quality long-term care home in an attractive market and result in immediate accretion to Adjusted Funds from Operations (“AFFO”) per share.
The remaining net proceeds of the Offering, together with any net proceeds from the Over-Allotment Option, will provide Sienna with enhanced financial flexibility to capitalize on current and future growth initiatives, primarily comprised of previously announced LTC developments and future acquisition opportunities.
The Company currently has two LTC projects under construction in Brantford and North Bay, Ontario and expects to begin construction on the redevelopment of its LTC home in Keswick, Ontario during the fourth quarter of 2024 (the “LTC Development Projects”). In aggregate, the LTC Development Projects represent a total investment of approximately $300 million and comprise a total of 627 new and redeveloped units, growing and enhancing the quality of Sienna’s portfolio. The Offering will allow the Company to execute on the LTC Development Projects, while maintaining a robust balance sheet. The LTC Development Projects are expected to generate a development yield of approximately 8.0% – 8.5% and be accretive to AFFO per share upon stabilization on a leverage neutral basis.
The Offering will also provide Sienna with balance sheet flexibility as it continues to evaluate attractive acquisition opportunities in its target markets that fit strategically with the Company’s growth objectives. Sienna remains committed to its prudent capital allocation approach of investing in strategic growth projects that are accretive to AFFO per share.
On or before August 16, 2024, the Company will file with the securities commissions or other similar regulatory authorities in each of the provinces and territories of Canada, a preliminary short form prospectus relating to the issuance of the Common Shares. The Offering is expected to close on or about August 28, 2024, subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange.
The securities offered have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.
ABOUT SIENNA SENIOR LIVING
Sienna Senior Living Inc. (TSX:SIA) offers a full range of senior living options, including independent living, assisted living and memory care under its Aspira retirement brand, long-term care, and specialized programs and services. Sienna’s approximately 12,500 employees are passionate about cultivating happiness in daily life. For more information, please visit www.siennaliving.ca.
FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management’s current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as “anticipate”, “continue”, “could”, “expect”, “may”, “will”, “estimate”, “believe”, “goals” or other similar words. Forward-looking statements in this press release include, but are not limited to, the expected closing date of the Offering and the intended use of net proceeds from the Offering together with any net proceeds from the Over-Allotment Option, the expected accretive nature of the Nicola Lodge Acquisition and the LTC Development Projects and the expected development yield of the LTC Development Projects, and are subject to, and expressly qualified by, the cautionary disclaimers that are set out in Sienna’s regulatory filings.
These forward-looking statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
NON-IFRS MEASURES
Certain terms used in this news release, such as AFFO per share, are not measures defined under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. AFFO should not be construed as an alternative to “net income” or “cash flow from operating activities” determined in accordance with IFRS as indicators of the Company’s performance. The Company’s method of calculating AFFO may differ from other issuers’ methods and accordingly, these measures may not be comparable to measures used by other issuers. The Company believes AFFO is a relevant measure of its ability to earn cash and pay dividends on its Common Shares. The definitions of these non-IFRS measures and an example of the reconciliation of AFFO to the most directly comparable IFRS measure are provided on pages 2, 38 and 42 of the Company’s management’s discussion and analysis for the three and six-month periods ended June 30, 2024,which is available on SEDAR+ (www.sedarplus.ca).
FOR FURTHER INFORMATION, PLEASE CONTACT:
David Hung
Chief Financial Officer and Executive Vice President
(905) 489-0258
david.hung@siennaliving.ca
Nancy Webb
Senior Vice President, Public Affairs and Marketing
(905) 489-0788
nancy.webb@siennaliving.ca
