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Carlyle to acquire care homes group for USD6.3bn

The board of directors of Manor Care has approved a transaction with global private equity firm Carlyle Group to take the company private in an all-cash transaction valued at some USD6.3bn

The board of directors of Manor Care has approved a transaction with global private equity firm Carlyle Group to take the company private in an all-cash transaction valued at some USD6.3bn.

Under the agreement, Manor Care shareholders will receive USD67 per share in cash, representing a 20 percent premium to the company’s closing price of USD55.75 on April 10, prior to its announcement it would evaluate strategic alternatives.

‘The board of directors and our financial advisors thoroughly evaluated a wide range of strategic alternatives to maximise shareholder value,’ says Manor Care chief executive and chairman Paul A. Ormond. ‘Partnering with Carlyle and providing our shareholders with this attractive valuation is the best of those alternatives.

‘This transaction affords a significant cash premium to our shareholders while allowing the company to continue its strategic direction and commitment to quality care. Carlyle appreciates the success we have achieved as a company and the role that our management and employees have played in the growth of this organisation and its unique capabilities.’__

Karen Bechtel, a Carlyle managing director and head of the health care sector team, says: ‘We are delighted to have this opportunity to invest in the largest owner and operator of facilities providing post-acute care services and long-term care in the country. Paul Ormond and his management and employee team have built a remarkable company that is positioned for continued growth and success.’ __

Completion of the transaction is contingent on approval by the company’s shareholders, and is expected to close in the fourth quarter of this year. The acquisition will be financed through a combination of commercial mortgage-backed securities, other debt financing and equity provided by Carlyle.

Manor Care’s financial advisor is JPMorgan, and its legal advisor is Cravath, Swaine and Moore. Citi also provided financial advisory services to the board of directors of Manor Care. The Carlyle Group’s financial advisors are Morgan Stanley, Credit Suisse and Banc of America Securities, and Latham & Watkins is its legal advisor. __

Based in Toledo, Ohio, Manor Care is a leading provider of short-term post-acute services and long-term care. The company’s nearly 60,000 employees provide care for patients and residents through a network of more than 500 nursing and rehabilitation centres, assisted living facilities, outpatient rehabilitation clinics, and hospice and home care agencies. The company operates primarily under the Heartland, ManorCare Health Services and Arden Courts brands.

The Carlyle Group is a global private equity firm with USD58.5bn under management that invests in buyouts, venture and growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace and defence, automotive and transportation, consumer and retail, energy and power, healthcare, industrial, infrastructure, technology and business services and telecommunications and media.

Since 1987, the firm has invested USD28.3bn of equity in 636 transactions for a total purchase price of USD132bn. The firm employs more than 800 people in 18 countries, while the combined Carlyle portfolio companies have more than USD87bn in revenue and employ more than 286,000 people worldwide.

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