Sonida Senior Living to Acquire CNL Healthcare Properties in $1.8B Deal

CNL Healthcare Properties Inc. – a public non-traded real estate investment trust which owns a national portfolio of senior housing communities – is set to be acquired by the publicly traded Sonida Senior Living Inc. (NYSE: SNDA) in a definitive cash-and-stock merger agreement valued at $1.8 billion. As a result of the transaction, Sonida will acquire 100% of the REIT.

Sonida is a leading owner, operator, and investor in senior living communities. The transaction, unanimously approved by both companies’ boards of directors, is expected to close in the first half of 2026 and will create the eighth largest owner of senior living assets in the United States.

“We are extremely pleased to announce this transformational deal, which will generate immediate per share earnings accretion and meaningful long-term value for all shareholders following closing,” said Brandon Ribar, president and chief executive officer of Sonida. “Sonida’s overarching objective is to capitalize on the long-term tailwinds of favorable demographics and supply constraints within senior living by operating and growing a best-in-class owner-operator platform. This transaction represents an inflection point in our pursuit of that objective as it more than doubles Sonida’s number of owned units while deepening and expanding our exposure to the most attractive geographic areas for our strategy.”

CNL had been actively exploring strategic alternatives since 2018.

The acquisition is occurring through a complex multi-step transaction that includes an equity purchase and two subsequent mergers. As a combined enterprise, Sonida expects to have an equity market capitalization of approximately $1.4 billion and a total enterprise value of approximately $3 billion upon closing.

“We expect to immediately unlock significant embedded synergies and [net operating income] growth through portfolio optimization while also deleveraging, increasing liquidity in our shares, and amplifying our access to capital. We will also continue to drive growth through organic and inorganic initiatives, with the care and services provided to our residents always remaining our top priority,” added Ribar.

Under the terms of the agreement, CNL shareholders will receive a combination of cash and Sonida common stock for each share they own. Each CNL share is valued at approximately $6.90, representing a premium to CNL’s NAV of $6.64 as of Dec. 31, 2024.

For the $6.90 per share, approximately 66% of the consideration is expected to be in the form of newly issued Sonida common stock and 34% in cash. Specifically, each share of common stock will be converted into $2.32 in cash and a number of shares of Sonida common stock, determined by dividing (a) $4.58 by (b) the volume weighted average price, or VWAP, of Sonida common stock during a measurement period prior to closing of the transaction and subject to an asymmetric collar.

To help ensure certainty of value for the stock portion of the merger consideration, the exchange ratio is subject to adjustment based on the VWAP during the measurement period prior to closing of the transaction, with a collar of 15% below the reference price ($22.73) and 30% above the reference price ($34.76). Based on maximum and minimum exchange ratios of 0.2015x to 0.1318x, respectively, Sonida existing shareholders’ ownership would range from 39.5% to 50% of the newly combined company’s diluted common equity, with estimated normalized funds from operations per share accretion of 28% to 62%, and 40% accretion at the reference price.

• If the Sonida stock price falls below $22.73, the exchange ratio is fixed at 0.2015 shares.
• If the Sonida stock price rises above $34.76, the exchange ratio is fixed at 0.1318 shares.
• Otherwise, the ratio will float based on the $4.58 value.

This structure is intended to provide CNL shareholders with a measure of certainty regarding the total value of the stock portion of the deal.

“This transaction culminates our focused strategic alternatives process and represents an exceptional outcome for CNL shareholders, residents and stakeholders,” said Stephen Mauldin, CEO, president and vice chairman of CNL Healthcare Properties, Inc. “Since 2012, CNL Healthcare Properties has thoughtfully and successfully built and actively managed a leading private-pay senior housing business while providing exceptional care, services and value to our approximately 8,000 residents. Upon the closing of this transaction, our shareholders will receive a premium to the mid-point of our most recent estimated NAV per share range and the opportunity for full and real-time liquidity through their receipt of cash and unrestricted Sonida common stock.

The combined company, which will continue to trade on the NYSE under the ticker “SNDA”, will be uniquely positioned in the public markets as a pure-play senior housing owner-operator platform, with a combined portfolio of 153 owned independent living, assisted living and memory care senior living communities, and nearly 14,700 units. The two portfolios have complementary footprints that deepen Sonida’s exposure to high-quality assets in strong submarkets in the South, Southeast and Midwest while expanding national exposure to markets including the Mountain West and Pacific Northwest.

Sonida expects the deal to be immediately accretive to normalized FFO and projects $16 million to $20 million in annual cost synergies, driven largely by eliminating CNL’s external advisory contract.

Sonida’s existing management team will lead the combined company. As part of the agreement, two CNL-designated individuals, including Mauldin, are expected to be appointed to Sonida’s board.

“Looking ahead, [CNL] shareholders, who will become Sonida shareholders, will importantly retain the opportunity to participate in future value creation in a dynamic and attractive senior housing environment. We are confident the combined company will be in a strong position to deliver on behalf of its shareholders,” added Mauldin.

The closing, anticipated in the second quarter of 2026, is subject to customary conditions, including stockholder approval from both CNL Healthcare Properties and Sonida Senior Living, regulatory consents, and Sonida securing necessary equity financing.

The agreement includes standard provisions, including a $30 million termination fee payable by either party under specific circumstances, such as a material breach or CNL accepting a superior acquisition proposal. To ensure financing certainty, Conversant Capital LLC and other major Sonida stockholders have already agreed to vote in favor of the transaction and purchase $110 million in new Sonida common stock at closing, at the reference price of $26.74.

Sonida has obtained committed bridge financing of $900 million available to fund the cash portion of the purchase price and repay the REIT’s existing corporate credit facilities. Sonida has also obtained a committed, upsized revolving credit facility of $300 million, which will replace its existing revolver upon closing and will provide meaningful available liquidity to the company for its opportunistic acquisition strategy.

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