Genesis HealthCare announced Monday that it has agreed to sell a controlling stake of its Chinese subsidiary, GRS-HS, to Riswein Health Industry Investment Co.
The transaction, expected to net Genesis $30 million for 51%, is slated to close in the first quarter of 2019, pending regulatory and licensing approvals.
The company’s three-year-old venture in China provides rehabilitation therapy services in 12 facilities in Hong Kong, Shanghai, Beijing and several other cities. The deal comes as Genesis attempts to restructure itself domestically after an extremely rough financial spell.
In a press release, Genesis said GRS-HS will seek approval to operate as a new, wholly owned foreign entity in China. GRS-HS expects the process to take about nine months to complete. As that process wraps up, Riswein is expected to lend GRS-HS $5 million for daily operating expenses.
After the sale is completed, Riswein and GRS-HS will use the $30 million cash infusion to further fund expansion in China, Genesis said.
“We have made significant headway introducing rehabilitation to China,” Genesis CEO George V. Hager Jr. said. “We are excited to partner with Riswein, who with their local resources and expertise will help us take GRS-HS to the next level.”
Lucy Han, CEO of Riswein, called the opportunities endless.
“As the Chinese population is aging, there is tremendous demand for rehabilitation services,” she said in the announcement. “We could not think of a better partner to help us expand rehabilitation services and design healthcare solutions throughout China.”
China-based Riswein provides health management, elderly health and rehabilitation, and health education and training services, according to Bloomberg.
Genesis HealthCare is one of America’s largest post-acute care providers with more than 450 skilled nursing facilities and assisted/senior living communities in 30 states.