THE ARISING · Markets & Strategy
Owners Reportedly Explore $1 Billion Sale of Largest US Senior Living Operator
The investors behind the largest senior living operator in the United States are reportedly looking for a buyer, and the price being discussed is about $1 billion.
According to an Oct. 20 Reuters report, which relied on one unnamed source, the companies that back Discovery Senior Living have hired the investment bank William Blair to find a buyer. Senior Housing News, which relayed the report, says a sale could value the company at $1 billion. No deal has been announced. A representative for Coastwood declined to comment on Wednesday. Discovery did not immediately respond to a request for comment.
The numbers give a sense of the price. Discovery's annual earnings before interest, taxes, depreciation and amortization (EBITDA) are about $65 million, according to the report. By our own arithmetic, $1 billion would be roughly 15 times that figure. The source does not say what the valuation includes, such as debt, so that multiple is a rough guide only.
Lee Equity Partners and Coastwood Senior Housing Partners invested in the Bonita Springs, Florida-based company in 2022. Since then, Discovery has grown to manage about 450 communities across the country. Its approach is to build regional platforms with their own brands and operations, all under the Discovery name. This year its total unit count passed that of Brookdale Senior Living, making it the nation's largest operator.
Growth is continuing. Earlier this week, Discovery announced it is acquiring Sunshine Retirement Living, an Oregon-based operator with 33 communities under management.
The timing fits a wider pattern. Earlier in October, Sunrise Senior Living changed hands in a $1 billion deal that gave majority ownership to BDT & MSD Partners. Its executive team owns the rest. Sunrise also announced a $7.5 billion development pipeline. Our October 15 coverage of that deal looked at what a new generalist buyer could mean for competition among operators. This report adds a second large operator that may be for sale, this time with the sellers being financial backers rather than a long-held owner.
If Discovery sells, it would be the latest top-five operator to change hands in a sizable deal this year, according to Senior Housing News. For investors, a completed sale near $1 billion would show what buyers will pay for scale built through acquisitions and regional brands. For competitors, it could mean a new owner with fresh capital. The source does not discuss regulatory review or any effect on residents or staff.
Watch for whether Discovery or its owners confirm a sale process, who emerges as a bidder, and whether any final price lands near the reported $1 billion.
A 6.3-Million-Cell Brain Atlas Finds Alzheimer's Is Not Just Faster Aging Does Annual Flu Vaccination Blunt the Next Shot? A Korean Trial Is Testing It Does Where Stem Cells Fail Matter as Much as How Many? Does Fading Nitric Oxide Silence Cell Recycling in Aging Arteries? Evidence Points the Other Way