LifeSpire Partners with HJ Sims to Pursue, Finance Important Acquisition


CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

LifeSpire Partners with HJ Sims to Pursue, Finance Important Acquisition

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of an August 2021 financing in the amount of $93,369,000 for LifeSpire of Virginia (“LifeSpire”). LifeSpire currently owns and operates four life plan communities in Virginia, consisting of The Chesapeake, The Culpeper, The Glebe, and Lakewood, all providing a full continuum of care. The financing provided funds for the acquisition of LifeSpire’s fifth community, for capital projects Lakewood and The Culpeper, and to refinance existing bank held debt with permanent bond debt.

Sims was engaged in 2021 to provide advisory services as LifeSpire pursued the acquisition of The Summit, a not-for-profit Life Plan Community in Lynchburg, Virginia owned by Centra Health System.  The Summit is a stabilized community in a complementary market to LifeSpire’s existing portfolio. After guiding LifeSpire through the valuation and competitive bid process, LifeSpire was selected to purchase the Independent and Assisted Living components of The Summit, and was also successful in obtaining adjacent developable land for future growth of the campus.

A plan of finance was explored for the acquisition with the following objectives: 1) provide sufficient funds to purchase The Summit, 2) maximize LifeSpire’s flexibility within its capital structure for future growth, and 3) minimize the cost of capital.

Sims recommended a finance plan that included reimbursement with tax-exempt bond proceeds of prior capital expenditures initially paid for in cash. The strategy minimized the amount of taxable debt needed to complete the acquisition. Further, the taxable debt incurred was structured as short-term debt which brought a variety of benefits, allowing for the taxable debt used for The Summit purchase to be repaid as new cottages are occupied, and removing any refinancing risk inherent with bank debt, while also managing Lifespire’s cash position through construction. The final purchase price of $30.25 million represents a substantial discount to the independent appraised value of $45+ million.  LifeSpire also maintained its existing “BBB” rating despite the risks associated with an acquisition.

In addition, Sims identified the opportunity for debt service savings on Lifespire’s existing bank debt which carried high rates relative to the current market, more restrictive covenants, and terms expiring in six years. The 2017A and 2017B bank-purchased bonds were refinanced with fixed rate bonds, eliminating put risk, maximizing flexibility, and reducing debt service.

The intentional shift to a capital structure with all long term bonds provides LifeSpire with a covenant package with no deviations from their Master Trust Indenture, maximizing strategic flexibility. With the refinancing of the Series 2017A and Series 2017B Bonds, LifeSpire holds no long-term bank debt, anticipating future deployment of the organization’s bank debt capacity for reinvestment into existing communities as well as in pursuit of strategic growth.

Sims achieved pricing for the $77,875,000 of Series 2021 Bonds with a yield of 1.95% to the first call date of the 30-year maturity. Lack of a debt service reserve fund did not negatively impact the pricing and the refinancing of the Series 2017A and Series 2017B Bonds saves over $400,000 in annual debt service. Sims secured a five-year call feature at a 103% premium declining to a par call after eight years.

“Sims has been a great partner throughout the process of welcoming The Summit to LifeSpire. They strategized during the competitive bid process and designed a creative plan of finance that strengthens our financial position and flexibility as we continue to grow. With the help of Sims, we maintained our BBB rating and achieved financing terms that exceeded our expectations,” says Jonathan Cook, President & CEO, LifeSpire.

Financed Right®: Tom Bowden: 804.398.8577 | [email protected] or Nick Roberts: 469.371.3946 | [email protected].

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Testimonials may not be representative of another client’s experience. Past performance is no guarantee of future results.  Facebook, LinkedIn, TwitterInstagram.