EFTA Document EFTA01447306

From: Tazia Smith Sent: 5/20/2014 9:32:56 AM To: jeevacation@gmail.com CC: Paul Morris I; Vinit Sahni ; Nay Gupta I I; Vahe Stepan ion Subject: Long Equity: Consider Elmm Brookdale Senior Living on macro/micro tailwinds (-30% upside to $42 tgt) (CI Attachments: pic09233.gif; pic07722.gif; pic16799.gif classification: confidential Jeffrey - Focusing on listed/exchange traded opportunities as requested: Consider buying S1-2mm position in Brookdale senior Living (BKD) macro Trend: Baby boomers retiring and aging population micro: merger tailwinds, pro-forma valuation upside and broader investor demand Brookdale senior Living (BKD) closed 5/19: $32.06 ($32.40 last) S3.8bn mkt cap (trades 1.3mm shs a day avg) S42 DB 12mo price target (implies —30% upside) vs. 37.71 cons (-16%) catalyst: merger proxy filing expected this month (Brookdale bid to acquire Emeritus, ESC ($1.4bn mkt cap), in late Feb for 12.8bn in stock; est merger completion is 3Q14) valuation: $42 . 12x proforma BKD+ESC 2015 cFFo/sh of $3.40 a. Strong Industry Fndamentals b. BKD's market leadership (10% pro forma market share and attractive national footprint + management team and corporate infrastructure lending itself to leverage/scale) c. mid-teen's growth characteristics with organic 6-8% and accretion from the ESC acquisition adding 8-10% for the next 2-3 years (ests = +18% in 2015 and + 27% in 2016). Q1 earnings report no 5/8, BKD posted its third consecutive quarter of double digit CFFO growth d. Current Valuation: 9.1x pro-forma 2015 CFFO/sh and just shy of 10x on a stand alone basis (8.9x pro-forma 2015 EV/EBITDA, 11.6x stand-alone) e. market Cap - pro-forma will be greater than S5bn, expected to deliver broader investor interest Key risks include: competition, new supply, capex requirements to upgrade Emeritus' portfolio, merger approvals, housing market, interest rate sensitivity CFFO = cash flow from operations https://ger.gm.cib.intranet.db.com/ger/document/pdf/0900b8c088436c25.pdf Brookdale Senior Living 12mo Price History as of 5/19/14 (Embedded image moved to file: pic09233.gif) used with permission of Bloomberg Finance LP (Embedded image moved to file: pic07722.gif) Tazia Smith Director I Key Client Partners - uS DB Securities Inc Deutsche Asset & wealth Management 345 Park Avenue, 10154-0004 New York, NY, USA Tel. Fax CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0101906 CONFIDENTIAL SDNY_GM_00248090 EFTA01447306