New Beginning for Erickson Following Bankruptcy Auction

After an 18-hour bankruptcy auction in December, Redwood Capital Investments emerged as the winner with a bid of $365 million for Erickson Retirement Communities, a financially troubled company that also happens to be one of the top brands in the seniors housing business. The rigorous process shows that no deal is done until the final bid is tallied, and that there’s real interest in seniors housing by deep-pocketed investors.

“This (deal) is a good sign for the sector,” says Robert Kramer, president at the National Investment Center for the Seniors Housing & Care Industry (NIC). “Clearly, word is getting out to investors about seniors housing.”

Redwood outbid a group led by private-equity giant Kohlberg Kravis Roberts & Co., along with private-equity firm Beecken Petty O’Keefe & Co., and Coastwood Senior Housing Partners. Other potential bidders expressed interest in the deal, according to Erickson’s bankruptcy attorney Thomas Califano at DLA Piper’s New York offices where the auction was held. But only Redwood and KKR participated in the final auction.