Beverly buyer to mull possible acquisition of Extendicare
Could a new nursing home mega-chain be in the making? Fresh off his acquisition of Beverly Enterprises Inc., the president and CEO of Fillmore Capital Partners LLC said he will be looking into a possible purchase of Extendicare Inc., a long-term care company based in Markham, Ontario.Ron Silva said financial representatives of Extendicare, the seventh-biggest nursing home provider in the U.S., talked with him two weeks ago about the investment. "Sure, we'll look at it," Silva told McKnight's Long-Term Care News on Thursday. "We have to close the first one first."
Shareholders for Beverly, the nation's second-largest nursing home company, approved the sale to Pearl Senior Care, an affiliate of Fillmore, just last week. The deal is expected to close by the middle of March.
Extendicare disclosed on Wednesday that it is exploring initiatives that would "provide value" for shareholders. A sale or reorganization of the company could be a part of that, according to a company statement. The company said it had appointed Lehman brothers as its advisor. Extendicare reported that its fourth-quarter earnings plummeted 61% to $22 million (Canadian.)
Christopher Barnes, spokesman for Extendicare, said Lehman Brothers has likely approached several companies about a possible acquisition. But the company has not yet confirmed that it is putting itself up for auction.
Silva said he was told Extendicare could be valued at $1 billion (U.S). Silva's company bought Beverly for about $1.8 billion. Silva previously told McKnight's that his company hoped to purchase another long-term care company that is sizeable to Beverly this year. Extendicare operates nearly 15,000 nursing beds, while Beverly operates 37,000. Combining them would build the largest chain by bed-capacity in the nation by far.
Extendicare, which has a U.S. arm, operates 439 nursing and assisted living facilities in North America. It also offers subacute care and rehabilitative therapy services. Home health care services are available in Canada. Beverly, by comparison, operates 342 skilled nursing facilities, as well as 18 assisted living centers, and 67 hospice and home care centers. It also offers rehabilitative services on a contract basis through Aegis Therapies.