Extendicare Announces Agreement to Sell Esprit Retirement Communities
03 Februar 2022 - 1:30PM
Extendicare Inc. (“Extendicare” or the “Company”) (TSX: EXE.TO)
announced today that it has entered into an agreement to sell its
retirement living operations comprised of 1,048 retirement living
suites across 11 retirement communities (the “Portfolio”), located
in Ontario and Saskatchewan, to Sienna-Sabra LP, a partnership
formed between Sienna Senior Living Inc. (TSX: SIA.TO) and SABRA
Healthcare REIT (NASDAQ: SBRA), for an aggregate purchase price of
$307.5 million, subject to customary closing adjustments (the
“Transaction”).
Closing of the Transaction is subject to customary closing
conditions, including receipt of regulatory approvals from the
Ontario Retirement Homes Regulatory Authority and Saskatchewan
Health Authority and pursuant to the Competition Act (Canada), and
is not conditional on financing or due diligence. The Transaction
is expected to close in the second quarter of 2022.
“With today’s announcement, we are repositioning Extendicare to
focus on growth in our long-term care and home health care segments
where we can leverage our deep expertise and scale to drive
improved performance and high-quality care for seniors across
Canada. Proceeds from the sale will provide the flexibility to
allocate capital strategically, including priority investments in
our people, technology and our long-term care redevelopment
program,” said President and CEO, Dr. Michael Guerriere. “We are
pleased with the value we will realize on our retirement living
investment.”
The Transaction is structured on a debt-free basis, with
existing debt associated with the Portfolio of approximately $172.4
million, as well as estimated debt prepayment costs of
approximately $6.3 million, being repaid at closing from
Transaction proceeds. The implied realized capitalization rate on
stabilized net operating income for the transaction is
approximately 6.0%. The estimated net proceeds to be realized on
the sale, net of debt repayments, taxes, certain closing
adjustments and transactions costs, is estimated to be
approximately $115.0 million.
“We are confident that the Sienna-Sabra joint venture will
provide our residents with quality services and ensure continuity
of day-to-day operations throughout the transition. We extend our
appreciation to the staff of our Esprit communities who
demonstrated a steadfast commitment to providing outstanding care
throughout the pandemic,” added Guerriere.
Advisors
CBRE Capital Markets is acting as financial advisor to
Extendicare and Bennett Jones LLP is acting as legal advisor to
Extendicare in connection with the Transaction.
About Extendicare
Extendicare is a leading provider of care and services for
seniors across Canada, operating under the Extendicare, Esprit
Lifestyle, ParaMed, Extendicare Assist, and SGP Purchasing Partner
Network brands. We are committed to delivering quality care
throughout the health continuum to meet the needs of the growing
seniors population. We operate or provide contract services to a
network of 120 long-term care homes and retirement communities (69
owned/51 contract services), provide approximately 9.0 million
hours of home health care services annually, and provide group
purchasing services to third parties representing approximately
88,400 senior residents across Canada.
Extendicare proudly employs more than 23,500 qualified, highly
trained and dedicated individuals who are passionate about
providing high quality care and services to help people live
better.
Forward-looking Statements
This press release contains forward-looking statements
concerning anticipated future events, results, circumstances,
economic performance or expectations with respect to Extendicare
and its subsidiaries, including, without limitation, statements
regarding its business operations, business strategy, growth
strategy, results of operations and financial condition, including
anticipated timelines, costs and financial returns in respect of
development projects. Forward-looking statements can often be
identified by the expressions “anticipate”, “believe”, “estimate”,
“expect”, “intend”, “objective”, “plan”, “project”, “will” or other
similar expressions or the negative thereof. These forward-looking
statements reflect the Company’s current expectations regarding
future results, performance or achievements and are based upon
information currently available to the Company and on assumptions
that the Company believes are reasonable. The Company assumes no
obligation to update or revise any forward-looking statement,
except as required by applicable securities laws. These statements
are not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to
differ materially from those expressed or implied in the
statements. For further information on the risks, uncertainties and
assumptions that could cause Extendicare’s actual results to differ
from current expectations, refer to “Risk Factors” in Extendicare’s
Annual Information Form and “Forward Looking-Statements” in
Extendicare’s Q3 2021 Management’s Discussion and Analysis filed by
Extendicare with the securities regulatory authorities, available
at www.sedar.com and on Extendicare’s website at
www.extendicare.com. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on Extendicare’s
forward-looking statements.
Non-GAAP Measures
Certain items used in this news release, such as “net operating
income”, or “NOI”, are not measures recognized under GAAP and do
not have standardized meanings prescribed by GAAP. NOI may differ
from similar computations as reported by other issuers and,
accordingly, may not be comparable to similarly titled measures as
reported by such issuers. NOI is not intended to replace earnings
(loss) from continuing operations, net earnings (loss), cash flow,
or other measures of financial performance and liquidity reported
in accordance with GAAP. Such items are presented because
management believes that they are a relevant measure of
Extendicare’s operating performance and ability to pay cash
dividends. A detailed description of this term and an example of
the reconciliation of NOI to the most directly comparable non-GAAP
measure can be found in Extendicare’s most recent Management’s
Discussion and Analysis, filed with the securities regulatory
authorities, and is available at www.sedar.com and on Extendicare’s
website at www.extendicare.com.
For further information, please contact:
Investor Inquiries:
David BaconSenior Vice President and Chief Financial
OfficerEmail: david.bacon@extendicare.comPhone: (905) 470-5587
Media Inquiries:
Laura GallantSenior Manager, External RelationsEmail:
laura.gallant@extendicare.comPhone: (416) 895-5676
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