Brookdale to Acquire American Retirement Corporation in $1.2 Billion Cash Transaction and Become Largest Operator of Senior Living Facilities in the United States

CHICAGO and NASHVILLE, Tenn., May 12 /PRNewswire-FirstCall/ -- Brookdale Senior Living Inc. (NYSE: BKD) and American Retirement Corporation Corp. (NYSE: ACR) today announced a definitive merger agreement under which Brookdale will acquire all of the outstanding shares of American Retirement Corporation for an aggregate purchase price of approximately $1.2 billion in cash, or $33.00 per share (on a fully diluted basis). The combination will create America's premier operator of senior living facilities. The boards of both companies unanimously approved the acquisition. The all-cash price of $33.00 per share represents an approximate 32% premium over the closing share price of American Retirement Corporation on May 12.

Brookdale has received a $1.3 billion equity commitment from an affiliate of Fortress Investment Group LLC. Brookdale has the option to reduce the amount of equity commitment up to $650 million through the proceeds of debt or equity within the next six months following the closing of the transaction.

Upon completion of the acquisition, American Retirement Corporation will become a wholly-owned subsidiary of Brookdale. The combined company will be the largest operator of senior living facilities in the United States based on total capacity with 535 facilities in 34 states and the ability to serve over 50,000 residents. The combined company will operate 73 independent living facilities with over 13,750 units, 413 assisted living facilities with over 21,640 beds, and 49 continuing care retirement communities with over 14,680 units/beds.

Commenting on the transaction, William B. Doniger, Vice Chairman of Brookdale, said, "This is an extraordinarily powerful combination of complementary businesses that creates the nation's largest operator of senior living facilities. American Retirement Corporation is a great strategic fit for us, and this combination creates, in our opinion, the highest quality portfolio of senior housing assets in the United States. The successful expansion of American Retirement Corporation's ancillary services business at our facilities represents significant upside to our future operating prospects. Finally, their expertise in the CCRC sector will enable us to expand our already successful strategy of supplementing our organic cash flow with accretive acquisitions. This transaction, together with the previously announced $750 million of acquisitions, should be meaningfully accretive to our organic cash earnings in 2007."

Mark J. Schulte, Chief Executive Officer of Brookdale continued, "We look forward to bringing the outstanding people and communities from American Retirement Corporation into the Brookdale family, and I especially look forward to welcoming Bill Sheriff to our management team as a true partner in our effort to provide our residents with the highest level of service and care in the industry. This is a great result for two outstanding organizations."

W.E. Sheriff, Chairman, President and Chief Executive Officer of American Retirement Corporation, added, "We have always taken our fiduciary responsibility to all of our shareholders very seriously and, with this merger, have demonstrated it again. We believe this is compelling for our shareholders and a great opportunity for our associates. Over the company's 28 year history, we have built a first-rate platform of products and services that make a difference in people's lives. We have achieved this success while creating and maintaining a corporate culture in which a commitment to quality and respecting our associates and residents is the top priority. We are excited about creating a national platform with a like-minded company that will provide incredible future growth opportunities. Our senior management team and I look forward to working side-by-side with Mark and his team to build a combined enterprise that is stronger than what either of our companies could accomplish on its own."

"After extensive due diligence, we believe that merging with Brookdale is the best path forward for our stakeholders. We believe it is a fair price for our shareholders and we support the creation of a company that will be able to offer a breadth and depth of services that will be unmatched in the industry," commented Frank Bumstead, Lead Director of American Retirement's Board of Directors.

Upon completion of the transaction, Mark J. Schulte and W.E. Sheriff will become co-Chief Executive Officers of the combined company.

The transaction is subject to customary closing conditions, including the approval by the shareholders of American Retirement Corporation and clearance under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is targeted to close in the third quarter of 2006.

Goldman, Sachs & Co. acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Brookdale while Bear, Stearns & Co. Inc. rendered an opinion to a special committee of the Brookdale board with respect to the equity financing for the acquisition. Cohen & Steers Capital Advisors, LLC acted as financial advisor and Bass, Berry & Sims PLC acted as legal advisor to American Retirement Corporation.