Leisureworld Senior Care Corporation

Leisureworld Senior Care Corporation

July 17, 2012 17:00 ET

Leisureworld Closes Acquisition of Madonna LTC Residence in Orleans, Ontario

MARKHAM, ONTARIO--(Marketwire - July 17, 2012) - Leisureworld Senior Care Corporation (TSX:LW) today announced that it has closed the previously announced acquisition of the Madonna Long-Term Care Residence in Orleans, Ontario, following the receipt of regulatory approvals by the Ontario Ministry of Health and Long-Term Care, and the Local Health Integration Network. Built in 2007, the Madonna Long-Term Care Residence is a 160 bed, "A" Class facility, with a current occupancy rate of 99.4% and a 60/40 private/shared accommodation ratio.

The purchase consideration for the transaction is $19.9 million, comprised of $13.4 million for the operating business and approximately $6.5 million of construction funding. Incremental expenses for transaction and land transfer costs are approximately $1.1 million. Leisureworld will finance the acquisition with a combination of $5.3 million in cash and working capital, and the assumption of $15.7 million in debt, at an all-in rate of 5.2%.

The Madonna Long-Term Care Residence, previously owned by Seasons Retirement Communities, generated $1.2 million in net operating income in 2011 after giving the effect of a 3% management fee, representing a cap rate of 8.62%, excluding the $10.35 per resident, per day construction funding. Leisureworld management expects that the integration of the Madonna facility with current operations will present an opportunity to leverage existing infrastructure costs, thereby improving the effective transaction cap rate. The transaction is expected to be accretive to Leisureworld's Adjusted Funds from Operations (AFFO) on an annual basis.

About Leisureworld

Leisureworld Senior Care Corporation is Canada's fifth largest operator of seniors' housing and the third largest licensed long-term care (LTC) provider in Ontario. Leisureworld owns and operates 27 LTC homes across Ontario with 4,474 beds. The Company also owns and operates six retirement residences and one independent living residence in Ontario and British Columbia. Leisureworld subsidiaries include: Preferred Health Care Services, an accredited provider of professional nursing and personal support services; and Ontario Long Term Care, a provider of purchasing services, and dietary, social work, and other regulated health professional services. For more information, please visit the Company's website at www.leisureworld.ca.

Forward-Looking Statements

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 Company's financial results or strategic plans. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care facilities by government entities. Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting Leisureworld's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity and government regulations.

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. The assumptions, risks and uncertainties described above are not exhaustive and other 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 current expectations of Leisureworld 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.

Contact Information

  • Leisureworld Senior Care Corporation
    Bruce Wigle
    Investor Relations
    (416) 447-4740 ext 232