Formation strikes gold with $1.7B Genesis buy

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Private equity firms continue to wheel and deal in the long-term care sector. A joint venture of Formation Capital LLC and JER Partners last month announced the purchase of Genesis HealthCare Corp., the fourth-largest U.S. nursing home chain, for $63 per share in an all-cash deal.

The firm plans to operate Genesis as a privately held, independent company. Genesis will retain its name.
"This transaction is a change in ownership – not a change in direction," said George V. Hager, Genesis chairman and CEO.
The acquisition, which is valued at $1.7 billion, includes the assumption of $450 million in debt. It is expected to close in four to eight months, spokeswomen said.
Formation Capital, a private equity firm based in Alpharetta, GA, gained wide prominence about two years ago when it attempted a hostile takeover of the company formerly known as Beverly Enterprises Inc. The Genesis deal differs from the Beverly sale because Genesis' directors initially explored possible sale options, sources said.
Formation ultimately did not win its Beverly attempt, but it, and many others, have stayed hot in the merger and acquisitions market.
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