Extendicare Acquires Nine Long-Term Care Homes from Revera
Deal News | Nov 28, 2024 | Globenewswire
Extendicare Inc. (TSX: EXE.TO) has announced a definitive agreement with Revera Inc. to acquire nine Class C long-term care homes situated in Ontario and Manitoba, alongside a vacant land parcel in Ontario, for approximately $60.3 million. The strategic acquisition will bolster Extendicare’s portfolio by including 1,396 beds, initiating a substantial redevelopment pipeline. The deal, subject to standard closing conditions and regulatory approvals, is projected to conclude by mid-2025. Additionally, Revera has contracted a third party for the sale of 21 Class C LTC homes, currently managed by Extendicare; this necessitates the termination of corresponding management agreements. Extendicare anticipates a repayment of $1.5 million from Revera related to these agreements and expects the transaction and third-party sale to result in a pro forma increase in its revenue and net operating income by $109.3 million and $6.8 million, respectively. Legal counsel for Extendicare is Torys LLP, while Revera is advised by Goodmans LLP with Stormont Partners acting as their financial advisor.
Sectors
- Healthcare
- Real Estate
- Mergers and Acquisitions
Geography
- Canada – Both Extendicare and Revera are Canadian companies with the transaction primarily impacting Ontario and Manitoba.
- Ontario – This Canadian province is home to the majority of the long-term care homes involved in the acquisition.
- Manitoba – This province includes one of the long-term care homes being acquired by Extendicare.
Industry
- Healthcare – The acquisition involves long-term care homes and redevelopment plans focused on health services for the elderly, thereby placing it squarely within the healthcare sector.
- Real Estate – Involves significant real estate assets such as long-term care facilities and unused land which are central to the acquisition.
- Mergers and Acquisitions – The transaction between Extendicare and Revera is a classic example of M&A activity, involving purchase agreements and asset transfers.
Financials
- $60.3 million – Aggregate cash consideration for the acquisition of nine long-term care homes and land.
- $109.3 million – Projected increase in annualized revenue as a result of the transaction and third-party sale.
- $1.4 million – Estimated annual increase in adjusted funds from operations (AFFO) post-transaction.
- $1.5 million – Expected repayment from Revera related to management agreements upon third-party sale.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Extendicare Inc. | Bidding Company | Company | A leading provider of senior care services in Canada, pursuing expansion through acquisition. |
| Revera Inc. | Selling Company | Company | A provider of accommodation, care, and services for seniors, selling some of its assets to Extendicare. |
| Axium Infrastructure | Joint Venture Partner | Company | Partner with Extendicare in the redevelopment of Carlingview Manor as part of a joint venture. |
| Torys LLP | Legal Advisor (Extendicare) | Company | Serves as legal counsel to Extendicare in the transaction. |
| Stormont Partners | Financial Advisor (Revera) | Company | Provides financial advisory services to Revera for this transaction. |
| Goodmans LLP | Legal Advisor (Revera) | Company | Advises Revera legally in the deal process. |