LEXPERT MAGAZINE
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APRIL 2016 13
LEXPERT: e assisted-living sector hasn't
been a top focus, but the premium paid for
this acquisition was so enormous, it made
a lot of people sit up and pay attention.
BayBridge, backed by the Ontario Teach-
ers' Pension Plan, offered to pay more than
double Amica's closing price. Let me ask,
first of all, what is it that BayBridge saw in
Amica that made the company so much
more valuable than its market capitaliza-
tion at the time? Was it a real estate play, a
demographic play, or both? And did Ami-
ca's holdings in luxury Vancouver property
play into the sizeable premium?
Andrew Oppenheim (Gowling WLG, for
Amica): Likely a question best answered
by the Baybridge team. at said, from the
Amica team's perspective, there was a very
strongly held view that the market was not
recognizing the value of the company —
and clearly, BayBridge agreed. And let me
say, all other parties who participated in
the process saw value well in excess of the
stock's trading price. e real estate is very
high-quality, in excellent locations and
hard to replicate. e demographics are fa-
vourable and there was developable excess
land which the stock price did not seem to
account for.
LEXPERT: Jeff, care to respond? e pre-
mium paid made this an awfully big deal
to swallow.
Jeffrey Singer (Stikeman Elliott LLP, for Bay-
Bridge): Certainly, this was a large transac-
tion for BayBridge, but they are a seasoned
management team who were able to bring
an expert and practical approach to the ne-
gotiation and execution of the transaction.
Oppenheim: ere are easily identifiable
synergies between BayBridge's existing
portfolio and the Amica assets, and the
process itself was designed to create com-
petitive tension that contributed to the
premium paid. All these factors helped to
justify the price eventually offered.
LEXPERT: e CPP Investment Board has
also been making moves into the seniors
housing and assisted-living space. Do you
see an increasing role for institutional in-
vestors in this space, as populations age
and urban real estate becomes more scarce?
How do the opportunities in the sector
match the investment mandates at these
pension funds?
Singer: ere was and by all accounts con-
tinues be a lot of interest in the assisted-
living sector, which should come as no sur-
Premium Prerequisite
prise given North American demographic
trends. e Amica acquisition was one of a
number of such deals, occurring just on the
heels of the Regal acquisition.
Stuart Olley (Gowling WLG): To the extent
the funds' investment mandates include
ownership of long-term income producing
assets, seniors housing and assisted living
residences likely fit well. In addition, the
ability of pension funds to take a very long-
term view makes this attractive. It is a capi-
tal-intensive business and they have a low
cost of capital.
LEXPERT: Do you see further consolidation
in this sector?
Oppenheim: e sector is very fragmented,
so further consolidation is likely although
the availability of large, quality portfolios is
more limited, which is another reason the
Amica assets were so attractive.
LEXPERT: How many months prior to an-
nouncement was it before you got the call
from clients on this? And what was your
relationship with them? Are you long-time
advisors? Recent hires?
Oppenheim: Gowlings was regular counsel
to Amica. I was on the board, and had been
since the company went public in 1997,
so we had a strong relationship with the
management and board of Amica. We pro-
vided advice regarding process and duties
of the board from the spring of 2015, when
an unsolicited offer was first received right
through to closing.
LEXPERT: Were you well acquainted with
the other side's legal team?
Oppenheim: As it turned out, the core of
the Gowlings M&A team on this mandate
was well-acquainted with BayBridge's legal
team. Martin Mix, Gord Chmilar and Stu-
art had all previously been at Stikemans be-
fore joining Gowlings, and Stuart and Jeff
BayBridge offered double Amica's market value, but the deal was hardly a love-in
INTERVIEW BY DAVID DIAS
Andrew
Oppenheim
Gowling
WLG (for
Amica)
Stuart
Olley
Gowling
WLG (for
Amica)
Jeffrey
Singer
Stikeman
Elliott LLP (for
BayBridge)
ON THE DEAL
Pension funds have exhibited a voracious appetite for asisted-living investments
as of late. How voracious? In December, BayBridge Seniors Housing Inc., owned
by the Ontario Teachers Pension Plan, agreed to pay $18.75 per share for Amica
Mature Lifestyles Inc. — 113 per cent more than the stock's trading value. The
enormous premium seemed like more than enough to clinch the deal, but Ami-
ca, which boasts luxury real estate in Vancouver of all places, was well aware
of its underpriced stock. It wasn't going to sell for anything below true value.
