After raising $154.8 million in transactions with Conversant Capital, one of the few publicly traded U.S. senior living operators is not just starting a new chapter but “a whole new book” — with a new name.
Dallas-based Capital Senior Living is rebranding to Sonida Senior Living, the company announced Wednesday. When the name change officially takes effect on Nov. 15, the company will trade on the New York Stock Exchange under the symbol “SNDA.”
Also on Wednesday, the Conversant deal closed and new members joined the Sonida board, marking the official end of a saga that involved months of conflict with shareholder Ortelius Advisors. After initially announcing the deal with Conversant, multiple shareholders provided constructive feedback that ultimately resulted in amended transactions at more favorable terms, Sonida CEO Kimberly Lody told Senior Housing News.
And despite the public battle that involved sometimes harsh rhetoric, Ortelius consistently expressed excitement about the future prospects of the company and the senior living industry, she emphasized, saying that Sonida looks forward to a “constructive relationship” with Ortelius moving forward. “We’re glad to be on the other side of it,” Lody said of the transaction closing. “Now we can focus on the next book — not just the next chapter but the next book.”
Lody and other company leaders have been contemplating a name change for over a year and undertook an internal process to create the new brand. While the Capital Senior Living brand has a rich legacy, the executive team wanted to convey a different message as the “essence” of the company.“‘Capital’ simply didn’t reflect the care and services we provide to our residents,” Lody said. “Given the impact the transaction will have on the growth and continued improvement of our communities and overall organization, we felt that this was the right time to introduce the new name.”
The name Sonida blends the musical term sonata with “vida” for “life,” to communicate that Sonida communities are full of the music of life.“We are committed to building communities where team members treat residents like friends and serve as caregivers, advocates and often as surrogate family, going above and beyond to create moving and memorable experiences that foster joy every day,” Lody said in a press release issued Wednesday.
Going forward, the company intends to build such communities by investing further in the resident experience and in workforce stability and culture, Lody and Sonida COO Brandon Ribar told SHN.On the resident experience front, the executives pointed to the recent introduction of a new memory care model — dubbed Magnolia Trails — as indicative of the approach to innovation.
Magnolia Trails is a multifaceted memory care framework with resident wellness and engagement as guiding principles. For instance, the model features evidence-based programming that takes place in shorter blocks of time, making the tasks and activities “more doable” for residents, Lody said. Magnolia Trails has propelled occupancy recovery in memory care, which has outpaced independent living and assisted living since the rollout of the program, Lody said.
A personalized, wellness-driven resident experience in independent living and assisted living should produce similar results, she and Ribar believe.However, both executives also are cognizant that the workforce crisis affecting senior living — and the economy as a whole — presents a challenge to their plans. They are pursuing a multi-pronged effort to bolster recruitment and retention.
Technology plays a key role. Sonida utilizes workforce management software called Stogo, which was originally developed for hospitals, Ribar said. Over roughly the last 18 months, Sonida has worked with Stogo to adapt the platform specifically for senior living. Being able to offer more flexible, shorter shifts is among the capabilities that Ribar views as a crucial adaptation to the labor market overall, and particularly to local dynamics.
“What’s going on in your micromarket is really, really important — being able to adjust on the fly, doing things that can continue to maintain the integrity of your operating model without sacrificing … from a margin perspective,” he said. In addition to real-time staffing, being able to offer real-time pay is a capability that Ribar views as attractive, and he is also prioritizing continued investment in retention-focused programs. Sonida previously had conducted market assessments and adjusted pay rates accordingly, so wage increases now are largely baked in, although Ribar is focused on “making sure that we’re highly competitive.”
And the completion of the Conversant deal should help create an attractive culture, supporting retention, Lody added. She described how she wants the workforce to feel:
“It’s an exciting time ahead of us, it’s a company I want to be a part of, because we’ve gone through and raised the capital, and we’re growing for the future.”
Strategizing for Growth
Lody assumed the CEO role in early 2019 and embarked on a turnaround effort dubbed “SING,” for stabilize, invest, nurture and grow. As part of that effort, the company brought on new leadership — including Ribar — and restructured financially, while slimming the portfolio from about 130 communities to roughly half that number. However, the Covid-19 pandemic complicated the turnaround process. The company issued a “going concern” warning, and with debt maturities on the horizon, operational expenses rising, and occupancy still in the early stages of recovery, the company ultimately faced a liquidity crunch.
The Conversant deal therefore brought much-needed capital, and will allow the company to address its outstanding debt issues while re-energizing a growth strategy.
The company already has started to execute on certain aspects of that strategy, including through the formation of a management business in early 2021. Going forward, Sonida is seeking to bring more communities under third-party management as well as grow the owned portfolio, with a preference for continuum of care properties that include independent living, assisted living and memory care.
Given the strong performance of Magnolia Trails as well as the leadership team’s previous experience in various facets of health care, memory care is an area of particular interest, Lody said.Sonida’s current footprint includes significant concentrations in Texas and the Midwest. While other properties are spread across different parts of the country, Lody said that she considers the company similar to a regional provider, given that local leaders have a high degree of autonomy.
Indeed, communities do not currently bear the Capital Senior Living brand and they will not take the Sonida name going forward.“While the corporate name is changing, our community names will remain unchanged, allowing us to continue to build upon the positive reputations our communities have earned in their local markets,” Lody said.
Some signage, marketing materials, vehicle wraps and the like do bear the Capital Senior Living name and logo, and these will be updated to Sonida over time — but given the local positioning of each community, such changes are minimal. So, the costs of the rebrand likewise will be minimal, Lody said.In addition to portfolio growth, Sonida’s executive leadership and newly constituted board will evaluate other avenues for expansion, Lody said. Such discussions could include a consideration of adding new revenue streams in areas adjacent to the company’s core business of senior living.
However, the challenges of the moment are the immediate priority — in addition to the labor headwinds, Sonida and other operators are contending with supply chain disruption, rising insurance expenses, ongoing management of Covid protocols, and other issues. “There’s a lot of noise in the system,” Lody said.
While she expects some of this noise will work itself out as pandemic-related disruption ends, the exact timing is uncertain. In the meantime, margins will be challenged and the operating environment will be taxing. But Lody “couldn’t think of a better time to do the capital raise,” given that Sonida is at an inflection point just as the industry is also evolving, coming out of the pandemic. Now, Sonida can forge new paths at a time when innovations are more urgently needed than ever.
Ribar underscored that point as well.