The Carlyle Group has entered into an agreement to acquire Toledo, Ohio-based Manor Care, a provider of short-term post-acute and long-term health services, for $4.9 billion (€3.6 billion). Carlyle will take the publicly traded company private in an all-cash transaction expected to close in the fourth quarter of this year.
Manor Care, which operates more than 500 facilities in the US, announced on 10 April that it was considering strategic alternatives. Its stockholders will receive $67 per share in cash, representing a 20 percent premium over the firm’s closing stock price on 9 April.
Carlyle will finance the buyout with a combination of commercial mortgage-backed securities, other debt financing and equity, according to a statement. Carlyle currently holds nearly 20 companies in its healthcare portfolio.
Like many healthcare provider deals, analysts note that the value of the underlying real estate is a strong selling point: Manor Care reportedly owns around 98 percent of its property portfolio.
Nursing homes have increasingly become an attractive sector for buyout and real estate firms alike. In May, after a protracted bidding war, private equity real estate firm JER Partners and healthcare investor Formation Capital acquired Genesis Healthcare in a $1.9-billion deal.
Genesis, which is headquartered in Kennett Square, Pennsylvania, operates more than 200 long-term care centers and assisted-living facilities in 13 states in the Eastern US.