KKR Bids on Erickson Retirement Communities

NEW YORK (Reuters) – Private equity firm Kohlberg Kravis Roberts & Co (KKR.AS) has led a team bidding for Erickson Retirement Communities LLC, a bankrupt U.S. retirement community developer holding an auction for its assets on Tuesday, a source familiar with the situation said.

The KKR bid, made with private equity management firm Beecken Petty O’Keefe & Co and CoastWood Senior Housing Partners, was submitted last week, the source said. The KKR bid competes with an earlier bid from Redwood Capital LLC.

The auction began at 10 a.m. at the offices of DLA Piper in New York, according to court documents.

Erickson struck an initial deal at the time it filed for bankruptcy in October to sell its assets to Redwood, subject to court approval. Under that deal, Redwood would stand to get a breakup fee if it does not win the auction.

“The auction process is underway and we expect to make an announcement when it is concluded,” said Erickson spokesman Mel Tansill in an emailed statement. “Until then, Erickson will have no comment.”

KKR declined comment. Beecken Petty O’Keefe and CoastWood were not immediately available for comment.

Erickson said in the court filing it was forced to file for bankruptcy as its senior living facilities saw substantial declines in occupancy, amid a decline in the credit markets, and difficulty for prospective residents to sell their homes.

The bid was earlier reported by Bloomberg.

The case is in re: Erickson Retirement Communities LLC, U.S. Bankruptcy Court, District of Northern Texas, No 09-37010. (Reporting by Megan Davies and Emily Chasan; Editing by Gary Hill)