Sonida Senior Living Announces Public Offering of Common Stock

Rhea-AI Summary

Sonida Senior Living (NYSE: SNDA) has announced a public offering of 4,000,000 shares of its common stock, with an option for underwriters to purchase an additional 600,000 shares. The company plans to use $102.9 million of the net proceeds to fund the acquisition of eight senior living communities and for general corporate purposes. Morgan Stanley, RBC Capital Markets, and BMO Capital Markets are acting as joint lead book-running managers for the offering.

The offering is being made through a prospectus supplement and base prospectus, which are part of an effective shelf registration statement filed with the SEC. Interested parties can obtain the preliminary prospectus supplement and accompanying base prospectus from the SEC's website or the offices of the joint lead book-running managers.

Positive

• Potential expansion through acquisition of eight senior living communities
• Raising capital for growth and general corporate purposes
• Involvement of reputable financial institutions as joint lead book-running managers

Negative

• Potential dilution of existing shareholders' ownership
• Increased share count may put downward pressure on stock price
• Additional debt or financial obligations from the acquisition

Insights

Financial Analyst

Sonida Senior Living's public offering of 4,000,000 shares with an additional 600,000 option is a significant move to raise capital. The intended use of $102.9 million for acquiring eight senior living communities signals an aggressive expansion strategy. This could potentially increase Sonida's market share and revenue streams. However, investors should be cautious about dilution of existing shares and the company's ability to integrate these new properties efficiently. The involvement of major underwriters like Morgan Stanley and RBC Capital Markets lends credibility to the offering, potentially attracting institutional investors. Overall, this move could strengthen Sonida's position in the senior housing market, but success will depend on execution and market conditions in the senior living sector.

Market Research Analyst

The senior housing market is poised for growth due to aging demographics, making Sonida's expansion timely. However, the sector faces challenges such as staffing shortages and potential regulatory changes. Sonida's acquisition strategy could provide economies of scale, potentially improving profitability. Investors should consider:

• The competitive landscape in the target acquisition areas
• Sonida's post-acquisition integration track record
• The pricing of the new shares relative to market value

The success of this offering and subsequent acquisitions could significantly impact Sonida's market position and financial performance in the medium to long term.

Legal Expert

The public offering's compliance with SEC regulations, including the use of a shelf registration statement, demonstrates Sonida's adherence to legal requirements. The company's provision of a 30-day option to underwriters for additional shares is a standard practice that provides flexibility. Investors should note:

• The offering is subject to market conditions and may not proceed as planned
• The prospectus and its supplements contain important information for investment decisions
• Regulatory risks in the senior living sector could impact future operations

While the legal framework appears sound, potential investors should carefully review all disclosures to understand the associated risks and terms of the offering.

DALLAS--(BUSINESS WIRE)-- Sonida Senior Living, Inc. (“Sonida” or the “Company”) (NYSE: SNDA), a leading owner, operator and investor in senior housing communities, announced today that it has commenced an underwritten public offering of 4,000,000 shares of its common stock. The Company expects to grant the underwriters a 30-day option to purchase 600,000 additional shares of the Company’s common stock.

The Company intends to use $102.9 million of the net proceeds, including any net proceeds from the underwriter’s exercise of their option to purchase additional shares, from the offering to fund the purchase price for the proposed acquisition of eight senior living communities and for other general corporate purposes.

Morgan Stanley, RBC Capital Markets, LLC and BMO Capital Markets are acting as joint lead book-running managers of the offering.

The offering is being made only by means of a prospectus supplement and an accompanying base prospectus, each of which is part of an effective shelf registration statement previously filed by the Company with the Securities and Exchange Commission (the “SEC”). An electronic copy of the preliminary prospectus supplement and accompanying base prospectus may be obtained at no charge on the SEC’s website at www.sec.gov. A copy of the preliminary prospectus supplement and the accompanying base prospectus relating to the offering may also be obtained from the offices of:

Morgan Stanley& Co. LLC 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal Department

RBC Capital Markets, LLC Brookfield Place, 200 Vesey Street, 8th Floor New York, New York 10281, Attention: Equity Syndicate Desk

BMO Capital Markets Corp. 151 W 42nd Street, 32nd Floor, New York, New York 10036, Attention: Equity Syndicate Department, with a copy to the Legal Department

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Sonida

Dallas-based Sonida Senior Living, Inc. is a leading owner, operator and investor in independent living, assisted living and memory care communities and services for senior adults. The Company provides compassionate, resident-centric services and care as well as engaging programming operating 83 senior housing communities in 20 states with an aggregate capacity of approximately 9,000 residents, including 70 communities which the Company owns (including eight communities in which the Company owns varying interests through two separate joint ventures), and 13 communities that the Company manages on behalf of a third-party.

For more information, visit www.sonidaseniorliving.com or connect with the Company on Facebook, Twitter or LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements, which are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially from those indicated in the forward-looking statements, including, but not limited to, the risks, uncertainties and factors identified from time to time in the Company’s filings with the SEC; the Company’s ability to consummate the proposed equity offering in the size and manner anticipated; the Company’s ability to generate sufficient cash flows from operations, additional proceeds from equity issuances and debt financings, and proceeds from the sale of assets to satisfy its short- and long-term debt obligations and to fund its acquisitions and capital improvement projects to expand, redevelop, and/or reposition its senior living communities; increases in market interest rates that increase the cost of certain of the Company’s debt obligations; increased competition for, or a shortage of, skilled workers, including due to general labor market conditions, along with wage pressures resulting from such increased competition, low unemployment levels, use of contract labor, minimum wage increases and/or changes in overtime laws; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance its existing debt as such debt matures; the Company’s compliance with its debt agreements, including certain financial covenants and the risk of cross-default in the event such non-compliance occurs; the Company’s ability to complete acquisitions, including its proposed acquisition of eight senior living communities, and dispositions upon favorable terms or at all, including the possibility that the expected benefits and our projections related to such acquisitions may not materialize as expected, that such acquisitions not being timely completed, if completed at all, that prior to the completion of such acquisitions, the targets’ businesses could experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, residents, other business partners or governmental entities, and that we may be unable to successfully implement integration strategies or achieve expected synergies and operating efficiencies within our expected timeframes or at all; the risk of oversupply and increased competition in the markets which the Company operates; the Company’s ability to improve and maintain controls over financial reporting and remediate the identified material weakness discussed in its recent Quarterly and Annual Reports filed with the SEC; the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; risks associated with current global economic conditions and general economic factors such as inflation, the consumer price index, commodity costs, fuel and other energy costs, competition in the labor market, costs of salaries, wages, benefits, and insurance, interest rates, and tax rates; the impact from or the potential emergence and effects of a future epidemic, pandemic, outbreak of infectious disease or other health crisis; and changes in accounting principles and interpretations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240815529959/en/

Investor Relations

Jason Finkelstein

Ignition Investor Relations

ir@sonidaliving.com

Source: Sonida Senior Living, Inc.

FAQ

How many shares is Sonida Senior Living (SNDA) offering in its public offering?

Sonida Senior Living (SNDA) is offering 4,000,000 shares of its common stock, with an option for underwriters to purchase an additional 600,000 shares.

What is the purpose of Sonida Senior Living's (SNDA) public offering?

The main purpose is to raise funds for the acquisition of eight senior living communities, with $102.9 million of the net proceeds allocated for this purpose. The remaining funds will be used for general corporate purposes.

Who are the joint lead book-running managers for Sonida Senior Living's (SNDA) public offering?

Morgan Stanley, RBC Capital Markets, and BMO Capital Markets are acting as joint lead book-running managers for Sonida Senior Living's (SNDA) public offering.

How can investors access the prospectus for Sonida Senior Living's (SNDA) public offering?

Investors can obtain the preliminary prospectus supplement and accompanying base prospectus from the SEC's website at www.sec.gov or from the offices of the joint lead book-running managers.