8-K: FOXO Technologies Announces Non-Binding Agreement to Acquire Two Assisted Living Facilities in Florida for $60 Million

FOXO Technologies Inc. has announced a non-binding agreement to acquire two assisted living facilities in Florida for a total consideration of $60 million.

Summary

• FOXO Technologies Inc. has executed a non-binding acquisition agreement for two assisted living facilities in Florida.
• The total consideration for the two facilities is $60 million, with each facility priced at $30 million.
• One facility has 129 units, and the other has 137 units.
• A portion of the purchase price is milestone-based, linked to increased revenues at the facilities.
• The parties aim to complete definitive agreements within 60 days.
• Closing is expected to occur between 60 and 120 days after completion of definitive agreements, subject to due diligence and financing.
• The company is considering issuing a new series of preferred stock to fund the acquisitions.
• FOXO believes these acquisitions will create a viable model for future acquisitions.

Sentiment

Score: 6

Explanation: The sentiment is cautiously optimistic. The company is expanding into a new sector, but the deal is non-binding and subject to financing and due diligence risks.

Positives

• The acquisitions are expected to provide recurring revenue and cash flow.
• FOXO believes diversifying into assisted living will create significant value for shareholders.
• The milestone-based payment structure aligns incentives with revenue growth at the facilities.
• The company believes these acquisitions will create a viable acquisition model for the Company to use to pursue additional, added value acquisitions for FOXO in the future.

Negatives

• The acquisition agreement is non-binding, meaning the deal may not be finalized.
• The closing is subject to satisfactory due diligence and securing financing.
• The company cannot confirm that due diligence will have a successful outcome or that they can successfully secure the capital for a new series of preferred stock or list this preferred stock as is being considered as a funding mechanism to complete these acquisitions.

Risks

• The acquisition may not be completed if due diligence is unsatisfactory or financing cannot be secured.
• The company's ability to successfully integrate and operate the acquired facilities is uncertain.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

FOXO is optimistic about completing the acquisitions and believes they will create a viable acquisition model for future growth.

Management Comments

• 'We are delighted to have executed this non-binding agreement for these strategic acquisitions,' said Seamus Lagan, Chief Executive Officer of FOXO.
• While we cannot confirm that due diligence will have a successful outcome or that we can successfully secure the capital for a new series of preferred stock or list this preferred stock as is being considered as a funding mechanism to complete these acquisitions, we are optimistic that we can complete these acquisitions as planned.
• 'We like the recurring revenue and cash flow model in this sector and are confident that diversifying our current services offerings in the health care sector will create significant value and opportunity for our shareholders.'

Industry Context

The acquisition reflects a trend of healthcare companies diversifying into assisted living facilities to capitalize on the growing demand for senior care services.

Comparison to Industry Standards

• It is difficult to compare this acquisition to industry standards without knowing the specific financial details of the facilities being acquired, such as revenue, EBITDA, and occupancy rates.
• Comparable companies in the assisted living sector include Brookdale Senior Living, Ventas, and Welltower.
• Typical acquisition multiples in the sector range from 8x to 12x EBITDA, but this can vary depending on the quality and location of the facilities.

Stakeholder Impact

• Shareholders may benefit from the potential revenue and cash flow generated by the acquisitions.
• The acquisitions could create new job opportunities in the assisted living facilities.
• Residents of the facilities may experience improved services and care under FOXO's ownership.

Next Steps

• Complete due diligence on the assisted living facilities.
• Negotiate and execute definitive agreements.
• Secure financing for the acquisition, potentially through a new series of preferred stock.
• Obtain necessary regulatory approvals.
• Close the acquisition and integrate the facilities into FOXO's operations.

Key Dates

Keywords

acquisition, assisted living facilities, FOXO Technologies, healthcare, Florida, merger