MARKHAM, ONTARIO--(Marketwired - Dec. 2, 2013) - Leisureworld Senior Care Corporation ("Leisureworld") (TSX:LW) today announced that it has completed 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"). 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 grows 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 owns and operates, or manages, is now 8,359.
"This high quality portfolio strengthens both our asset base and expertise in senior care." says Lois Cormack, President and CEO. "We have a much larger platform, broader array of services and are adding 1,500 experienced and dedicated staff to the Leisureworld team."
The purchase price was comprised of approximately $218.5 million for the Properties and the Management Business (excluding a downward mark-to-market adjustment on assumed debt of approximately $2 million) 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 ("Subscription Receipts") and extendible convertible unsecured subordinated debentures (the "Convertible Debentures"), completed on April 25, 2013.
As a result of the completion of the Acquisition, each outstanding Subscription Receipt will be 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 (being equal to the aggregate amount of dividends per common share for which record dates have occurred since the issuance of the Subscription Receipts), less any applicable withholding taxes. Trading in the Subscription Receipts has been halted on the Toronto Stock Exchange and Leisureworld expects that the Subscription Receipts will be delisted from the Toronto Stock Exchange after the close of markets today and that the common shares to be issued in exchange for the Subscription Receipts will immediately commence trading on the Toronto Stock Exchange.
In addition, the maturity date of the Convertible Debentures has been automatically extended to June 30, 2018.
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. For more information, please visit Leisureworld's website at www.leisureworld.ca.
Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words and include, among other things, statements related to the use of the income guarantee to complement cash flow. Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. Unanticipated events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect Leisureworld's current expectations as at the date of this news release and speak only as at the date of this news release. Leisureworld does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
The securities offered pursuant to the subscription receipt offering have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.