Sienna Senior Living Inc. (TSX:SIA) and Sabra Health Care REIT, Inc. (NasdaqGS:SBRA) entered into an agreement to acquire Portfolio of Eleven Private-Pay Retirement Residences in Ontario and Saskatchewan from Extendicare Inc. (TSX:EXE) for approximately CAD 310 million on February 3, 2022. Under the terms of agreement, Sienna will acquire 50% ownership interest in a portfolio for CAD 153.75 million and Sabra is acquiring the other 50% interest. CAD 6 million of the purchase price will be paid upon execution of the agreement and will serve as deposit. The transaction is structured on a debt-free basis, with existing debt associated with the portfolio of approximately CAD 172.4 million, as well as estimated debt prepayment costs of approximately CAD 6.3 million, being repaid at closing from transaction proceeds. The acquisition and related transaction costs are being financed through a combination of: (i) CAD 150 million acquisition term loan that the Sienna expects to refinance post-closing; (ii) proceeds from the previously announced sale of Rideau Retirement Residence and Camilla Care Community; and (iii) draws on the Sienna's existing credit facilities. As of March 23, 2022, Sienna Senior Living completed a bought deal offering for aggregate gross proceeds of CAD 86.25 million. The company intends to use the net proceeds of the offering to partially fund this acquisition. If the transaction is not completed by reason of the default of the purchasers, then the deposit and any accrued interest thereon shall be forfeited to the sellers.

The acquisition is subject to customary closing conditions for transactions of this nature, including the receipt of all necessary regulatory approvals, including approvals from the Ontario Retirement Homes Regulatory Authority and the Saskatchewan Health Authority and pursuant to the Competition Act (Canada). The deal is also subject to execution of escrow agreements and is expected to complete in late Q2 2022. The acquisition is expected to be accretive to Sienna's OFFO and AFFO per common share on a leverage neutral basis. TD Securities Inc. is acting as exclusive financial advisor to Sienna while Rose Bailey and Charlene Schafer of Torys LLP is acting as legal advisor. Kevin L. Sherry of Sherry Meyerhoff Hanson & Crance LLP is also acting as legal advisor to Sienna in connection with the acquisition. CBRE Capital Markets is acting as financial advisor to the sellers while Aleksandra Finelli, Jeff Kerbel, Tom Bauer, Susan Seller, John Gilmore, Adam Kalbfleisch, Zirjan Derwa, Jeilah Chan and Sarah Gilbert of Bennett Jones LLP is acting as legal advisor.