Genesis HealthCare Announces Acquisition of its Real Estate Assets by Health Care REIT, Inc.2/28/2011
Kennett Square, PA -- 02/28/11 --
An Investment in Quality Patient Care
Kennett Square, PA, February 28, 2011….Genesis HealthCare (Genesis), a leading provider of short-term post-acute, rehabilitation, assisted living and long-term care services, along with its owners Formation Capital and JER Partners, today announced that Health Care REIT, Inc. (HCN), a health care real estate investment trust has signed a definitive agreement to acquire substantially all of Genesis' real estate assets for a purchase price of $2.4 billion.
Pursuant to the agreement with Genesis, Health Care REIT will acquire 147 post-acute, skilled nursing and assisted living facilities located in 11 states in the Northeast and Mid-Atlantic. Genesis will lease the properties from Health Care REIT and continue to operate all facilities with an emphasis on high-quality patient care.
"We believe this transaction allows for Genesis HealthCare to significantly expand its premiere post-acute healthcare delivery system and infrastructure," notes Arnold M. Whitman, Co-Chairman of Genesis. "Genesis' highly respected and tenured management team will continue to operate the facilities and build their network of healthcare and services for seniors. We look forward to this next phase in Genesis' future as we work together with Health Care REIT to build a truly exceptional company in this changing health care environment," adds Steven E. Fishman, Co-Chairman of Genesis.
"Genesis is pleased to have the opportunity to partner with Health Care REIT," notes George V. Hager, Jr., Chief Executive Officer of Genesis. "Together, we will continue our high level of investment in optimizing and expanding our facilities to meet the needs of our patients, residents and their families. Genesis prides itself on providing its patients and residents with outstanding clinical care, delivered by highly skilled practitioners in a warm and comfortable setting. We selected Health Care REIT as our partner because of this shared vision and its commitment to serve as a trusted, long-term partner in our growth."
Transaction Benefits to Genesis
• Opportunity to Better Meet Patient and Resident Needs: Genesis will have
opportunities to better meet the needs of its patients and residents. The partnership with Health Care REIT will provide the capital required to invest in its current facilities and to build new state-of-the-art post-acute facilities to provide an excellent level of patient care in the most cost-effective setting.
• Opportunity for Collaboration: The transaction also creates potential
synergies and partnership opportunities with Health Care REIT's health system, assisted living and independent living portfolio partners in the Northeast and Mid-Atlantic. With health care reform initiatives focused on bundled payments, shared risk and shared accountability for effective outcomes, health care providers need to be prepared to adjust their care models to meet the changing demands of the health care system. This new partnership will provide a platform for collaboration and the sharing of best practices between Health Care REIT's portfolio partners.
• Continuing Strength of Management Team: Genesis' executive management team, led by CEO George V. Hager, Jr. has been in place for almost 20 years and will continue to manage operations. The team's forward-thinking approach to service delivery recognizes that coordination across the health care continuum is critical to delivering the high-quality care patients and their families have come to know and trust.
"The acquisition is consistent with our commitment to invest with best-in-class operators across the health care acuity spectrum," states George L. Chapman, Health Care REIT's Chairman, Chief Executive Officer and President. "Genesis is well positioned to meet the needs of an increasing post-acute, short-stay patient population while continuing to care for the ongoing needs of its longer term patients. In addition, Genesis has built a robust pipeline of potential acquisition and development opportunities as it expands its footprint along the eastern seaboard. This new partnership between Genesis and Health Care REIT is an exciting growth story."
The transaction, which has been approved by Health Care REIT's Board of Directors and the shareholders of Genesis, is structured as an equity purchase of the Genesis subsidiary that holds the real estate. Completion of the transaction is subject to satisfaction of conditions regarding regulatory approvals and third party consents, and to other customary closing conditions. HCN expects the acquisition to close during the 2nd quarter of 2011, although there can be no assurance that the transaction will close or, if it does, when the closing will occur.
Genesis HealthCare Corporation is dedicated to improving the lives we touch through the delivery of high-quality healthcare and everyday compassion.
About Genesis HealthCare Corporation
Genesis HealthCare Corporation is one of the nation's largest post-acute and skilled nursing care providers with over 200 locations in 13 eastern states. Genesis also supplies contract rehabilitation therapy to over 1,100 healthcare providers in 28 states and the District of Columbia. For more information, go to www.genesishcc.com.
About JER Partners and Formation Capital
JER Partners (JER) is a fully integrated private real estate investment management company 30 years of experience in sourcing, underwriting and managing a broad spectrum of real estate equity investments and debt products in the U.S. and Europe. Together with its financial and operating partners, JER has purchased and managed approximately 15,000 assets totaling $28 billion, including $4 billion of gross investments in healthcare real estate. The firm also invests in CMBS, mezzanine financing and other structured debt products. For more information, visit www.jer.com.
Formation Capital, LLC invests equity in the senior housing and healthcare industry. Over the past 6 years, Formation Capital has coordinated the investments in over $4 billion of transactions. As a focused and experienced underwriter and asset manager for senior housing and healthcare investing, Formation Capital has successfully developed a strategy of "alignment of interests" with both capital and operational partners in a unique and dynamic approach to investing. For more information, visit www.formationcapital.com.
About Health Care REIT, Inc.
Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of senior housing and health care real estate. The company also provides an extensive array of property management and development services. As of December 31, 2010, the company's broadly diversified portfolio consisted of 683 properties in 41 states. More information is available on the company's website at www.hcreit.com.