Manor Care approves sale to private equity firm

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Following the lead of other major long-term care chains, the board of Manor Care Inc., the largest nursing home chain in the United States, has agreed to sell the company to a private equity firm.

The Carlyle group will purchase Manor Care for about $4.9 billion and also assume what is believed to be about $1.4 billion in debt. The price represents a 20% premium over the per-share market value in April, when the company signaled it could be up for sale. Shareholders will receive $67 per share.

The sale represents the third recent major nursing home chain to be acquired by a privately held company. Fillmore Capital Partners LLC bought the company formerly known as Beverly Enterprises Inc. last year for nearly $2 billion. Just last month, shareholders of Genesis HealthCare Corp. approved the sale of the company to a joint venture between Formation Capital LLC and JER Partners for $1.43 billion, excluding debt.

Long-term care companies such as Manor Care are enticing buyout groups because of the growing demand for long-term care services by the elderly, and attractive Medicare payments. Medicare payments accounted for 39% of Manor Care's 2006
revenue, according to its annual report.

The Carlyle Group, a global private equity firm, last month notably agreed to buy Home Depot Inc.'s HD Supply unit and General Motors Corp.'s Allison Transmission business.