Citi Investment Banking Pitch Book
Situation Overview
• Aleris Life Inc. (Nasdaq: "ALR"), f/k/a Five Star Senior
Living Inc., operates an evolving portfolio of residential and
lifestyle services for older adults
2
• Facing financial and operational difficulties, ALR began
restructuring its business in 2019 by reaching an
agreement with its main landlord, Diversified Healthcare
Trust (Nasdaq: "DHC"), f/k/a as Senior Housing Properties
Trust, to restructure the business arrangement between
the parties
- In addition to the replacement of master leases with
management agreements, the agreement provided for
the issuance of ALR stock to DHC (externally
managed by The RMR Group LLC, a subsidiary of
The RMR Group Inc. (collectively, "RMR")), resulting
in DHC becoming a significant shareholder of
AlerisLife (currently owning 32.8% of ALR's common
stock)
• ABP Trust ("ABP"), a private entity owned and controlled
by Adam Portnoy, approached ALR in late 2022 with the
intention to acquire ALR in coordination with DHC in an
all-cash transaction
(2)
(3)
(4)
Separately, ALR has a business management
agreement with RMR
-
Following several weeks of negotiations, ABP
proposed an offer price of $1.31 per share,
representing a premium of approximately 62% over
the closing share price on February 2, 2023
Capitalization
As of Year End 2022
($ in millions, except per share data)
Share Price
Fully Diluted Shares Outstanding (2)
Total Implied Equity Capitalization
Mortgage Notes
Senior Secured Term Loan
Total Debt
(-) Cash and Cash Equivalents(3
Net Debt
Total Implied Enterprise Value (TEV)
Selected Implied
EBITDA Multiples
TEV / 2022E EBITDA
TEV / 2023E EBITDA
Source: ALR Management, public filings, press releases and FactSet as of 02/02/2023.
Note: ALR projections and 2022 YE capitalization per ALR management as of February 2023. "NM denotes not meaningful.
(1) At Market share price as of 02/02/2023.
TEV / 2024E EBITDA
Selected Implied Leverage Multiples
Net Debt / 2023E EBITDA
Fully diluted shares outstanding as of 02/02/2023 per ALR management.
2022 YE cash balance of $49.6 excluding cash held by ALR's captive insurance entity and not readily available for general operating purposes per ALR management.
EBITDA burdened by non-cash stock-based compensation.
2022E EBITDA includes three quarters of actuals and one quarter of projections.
Statistic(4)
($15.6)
4.3
18.0
At Market
$0.81(¹)
33.5
$27.1
6.4
67.6
$74.0
(49.6)
$24.4
$51.5
Metric
NM
11.9x
2.9
5.6x
At Transaction
$1.31
33.5
$43.8
6.4
67.6
$74.0
(49.6)
$24.4
$68.2
Metric
NM
15.7x
3.8
5.6x
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