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Keppel unit completes 50% acquisition of US senior housing firm

The Hacienda at the River.jpg
Watermark currently manages 58 senior housing communities across the US, which include The Hacienda at the River located in Tucson, Arizona.

KEPPEL Corp on Tuesday said its subsidiary, Keppel Capital Senior Living, has completed the acquisition of a 50 per cent stake in US senior housing operator Watermark Retirement Communities (WRC).

Keppel Corp first announced the transaction back in August 2018, which included the purchase of a 50 per cent stake in certain affiliates of WRC.

The sellers are Diana and David Freshwater Living Trust, the Barnes Family Revocable Trust, and its related entities.

These sellers hold minority interests in the retirement communities they manage, which are operated as joint ventures (JV) by the sellers with capital partners. 

Instead of acquiring 50 per cent of the WRC affiliates, Keppel has acquired "50 per cent of the profit interests of the minority JV interests held by the sellers", the company said. 

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Therefore, the purchase price for the acquisition was adjusted from about US$77.3 million to around US$84.6 million to account for the sellers being solely responsible for future capital call obligations relating to the minority JV interests. 

The company added that the acquisition is a "strategic move by the Keppel Group to expand into the fast-growing senior-living sector".

"Keppel is well placed to expand its capabilities into senior living, with a view to offering customised solutions to Singapore and other markets in Asia.

"Keppel Capital can also raise funds and potentially serve as a capital partner for future senior-living projects managed by WRC, thereby offering more options to Keppel Capital's investors and providing another avenue to grow Keppel's assets under management and recurring management fees," the group added.

In connection with the acquisition, WRC has been converted into a Delaware limited liability company named Watermark Retirement Communities, LLC.

Keppel Corp shares closed at S$6.41 on Monday, up S$0.07 or 1.1 per cent.

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