UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
March 21, 2006 (March 17, 2006)
AMERICAN RETIREMENT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Tennessee 01-13031 62-1674303
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
111 Westwood Place, Suite 200
Brentwood, Tennessee 37027
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(Address of Principal Executive Offices) (Zip Code)
(615) 221-2250
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On March 17, 2006, a joint venture, of which we are a member, entered into
an Asset Purchase Agreement with an affiliate of Westport Senior Living to
acquire Freedom Village of Bradenton, a continuing care retirement community
located in Bradenton, Florida. The aggregate purchase price for the acquired
assets is $95 million plus the assumption of certain resident refund liabilities
and other liabilities, subject to customary closing adjustments and transaction
expenses.
We will consummate the acquisition through a joint venture to be formed
with investors in a senior housing strategy managed by Prudential Real Estate
Investors, the real estate investment management business of Prudential
Financial, Inc. The joint venture will be owned 20% by us and 80% by our joint
venture partner. GMAC Commercial Mortgage Bank ("GMAC") has committed to provide
the joint venture with approximately $62 million of senior debt financing for
the acquisition. The remainder of the purchase price will be funded by
proportional capital contributions by the joint venturers. We will manage the
independent living component of the community pursuant to a long-term management
agreement and will lease the health center (assisted living and skilled nursing
components) from the joint venture.
In connection with the execution of the agreement, we and our joint venture
partner made a $3 million earnest money deposit toward the purchase price, which
is being held by a third party escrow agent. The consummation of the
transaction, which is subject to satisfaction of certain closing conditions and
contingencies, including satisfactory completion of due diligence, is expected
to be no later than May 31, 2006.
Risks Associated with Forward-Looking Statements
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This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws, which are intended to be
covered by the safe harbors created thereby. Those forward-looking statements
include all statements that are not historical statements of fact and those
regarding the intent, belief or expectations of us or our management, including,
but not limited to, all statements regarding the formation of the joint venture
and the consummation of the acquisition and the related financing, and all
statements regarding our expectations concerning the future financial
performance of the acquired communities and their effect on our financial
performance. All forward-looking statements may be affected by certain risks and
uncertainties, including without limitation the following: (i) our ability to
successfully form the joint venture, complete the acquisition and integrate it
into our operations, (ii) our ability to consummate the anticipated GMAC
financing, (iii) our ability to satisfy the closing conditions for the
transaction, (iv) our ability to resell units at the community, (v) the risk
that we will be unable to improve our results of operations, increase cash flow
and reduce expenses, (vi) the risks associated with adverse market conditions of
the senior housing industry and the United States economy in general, (vii) the
risks associated with our debt and lease obligations, and (viii) the risk
factors described in our Annual Report on Form 10-K for the year ended December
31, 2005 under the caption "Risk Factors" and in our other filings with the SEC.
Should one or more of those risks materialize, actual results could differ
materially from those forecasted or expected. Although we believe that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of these assumptions could prove to be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this Form 8-K will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us
or any other person that our forecasts, expectations, objectives or plans will
be achieved. We undertake no obligation to publicly release any revisions to any
forward-looking statements contained herein to reflect events and circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events.
Item 7.01. Regulation FD Disclosure
On March 21, 2006, we issued a press release describing the foregoing
transaction. A copy of the press release is furnished herewith as Exhibit 99.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AMERICAN RETIREMENT CORPORATION
By: /s/ Bryan D. Richardson
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Bryan D. Richardson
Executive Vice President - Finance
and Chief Financial Officer
Date: March 21, 2006
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated March 20, 2006