The Carlyle Group has closed its $6.3 billion (€4.3 billion) take-private of Manor Care despite labour union attempts to scupper the deal.
“We are pleased with this successful outcome,” Paul Ormon, Manor Care's chief executive, said in a statement. “We look forward to working with Carlyle and continuing to provide quality care to our patients and residents.”
The private equity firm agreed to take the US' largest nursing home chain private in July for $67 per share, which shareholders and the Federal Trade Commission approved. But its original 7 November closing date was pushed back at least twice as the Service Employees International Union convinced several state legislatures to hold hearings on the buyout, and in some cases, delay granting the private equity firm necessary operating licenses.
The SEIU, which has been protesting Carlyle for numerous reasons in recent months, launched a campaign against the buyout that it claims is the largest-ever multi-state campaign against a private equity deal. It included demonstrations outside the firm’s Washington DC office, a protest caravan traveling around the country, radio and direct mail ads, blogs and YouTube videos.
The labour union said on its blog that it launched the campaign because of “growing concern that the Carlyle Group’s focus on its own profits may be coming at a high cost to seniors, taxpayers, and workers” and called on the private equity firm to “put patient care above CEO profits”.
On a federal level, Senators Hillary Clinton, a Democrat representing New York and Presidential candidate, and Charles Grassley, a Republican from Iowa, separately asked the Government Accountability Office to review the deal in October, and in November two congressional committees held hearings examining the effects of private equity ownership on patient care levels.
But at least one House hearing failed to find private equity at fault for substandard care at nursing homes.
“We’ve been looking incorrectly, I think, at private equity today,” said House Ways and Means Health subcommittee chairman Pete Stark. “The question is: Are we to have some minimum standards, as we do with acute care hospitals, for nursing homes to qualify for Medicare?”
Congressional interest in the matter stemmed from a September New York Times article which found through its own research that substandard patient care was prevalent at private equity-owned US nursing home chains. The Times article did not include data on Manor Care nursing homes, however, and Carlyle does not have other nursing home holdings in its portfolio.
Despite the deal’s completion, the SEIU has not ceased issuing Manor Care-related press releases. The labour union is calling on the private equity firm to increase staff levels and is urging various states to continue reviewing the deal.
“Though Carlyle has announced the deal closing, at least seven states have yet to transfer licenses as part of the deal, according to the latest information available to SEIU,” the union said. “SEIU encourages those states to continue their close examinations of the deal and the impacts this deal could have on the fragile seniors in Manor Care homes.”