Leisureworld Completes Significant Portfolio Acquisition
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Goodmans represented Leisureworld Senior Care Corporation (“Leisureworld”) (TSX:LW) in connection with the completion of its previously announced acquisition of 10 properties in Ontario consisting of 6 long-term care (“LTC”) homes, 2 retirement residences and 2 properties containing both LTC and retirement residences components. The acquisition comprises in total 1,235 LTC beds and 326 retirement suites (the “Properties”), as well as the third party seniors living management business previously operated by Specialty Care Inc. (the “Management Business”).
The acquisition makes Leisureworld the second-largest licensed LTC provider in Ontario, and increases Leisureworld’s number of LTC beds by 28% and number of retirement suites by 44%. In addition, 85% of the acquisition’s LTC portfolio consists of New or Class A beds, improving Leisureworld’s mix of LTC beds. The Management Business represents a new division of Leisureworld’s business, further expanding its offering of services in the seniors housing sector. The total number of LTC beds and retirement suites that Leisureworld now owns and operates, or manages, is 8,359.
The purchase price was comprised of approximately $218.5 million for the Properties and the Management Business and approximately $33 million for construction funding receivable.
The purchase price was satisfied, in part, by the assumption of approximately $72 million of existing debt and the issuance of 564,516 common shares of Leisureworld to the vendor for $7.0 million. A further portion of the purchase price was funded from new mortgage loans totaling approximately $63 million, which bear interest at a weighted average rate of 4.1% per annum and have a weighted average term to maturity of approximately 5.8 years. The balance of the purchase price was funded from the net proceeds of Leisureworld’s public offering of subscription receipts and extendible convertible unsecured subordinated debentures completed on April 25, 2013. Each outstanding subscription receipt was exchanged for one common share of Leisureworld, resulting in the issuance of 6,353,750 common shares in the aggregate, and a cash dividend equivalent payment of $0.60 per subscription receipt.
Leisureworld Senior Care Corporation is one of Canada’s largest operators of seniors’ housing and the second-largest licensed LTC provider in Ontario. Leisureworld has 7,500 employees and owns and operates 35 LTC homes across Ontario with 5,733 beds. Leisureworld also owns and operates 10 retirement residences representing 1,065 suites, in Ontario and British Columbia. Under its management services division, Leisureworld manages 1,133 LTC beds and 428 retirement suites. Leisureworld subsidiaries include Preferred Health Care Services, an accredited provider of professional nursing and personal support services.