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MARKHAM, Ontario, Sept. 13, 2023 (GLOBE NEWSWIRE) — Extendicare Inc. (“Extendicare” or the “Company”) (TSX: EXE) announced today that, effective September 13, 2023, it has completed the previously announced transaction with a fund managed by Axium Infrastructure Inc. and its affiliates (“Axium”) to form a limited partnership joint venture, Axium Extendicare LTC LP (the “Joint Venture”), to redevelop certain of Extendicare’s Class C long-term care (“LTC”) homes, in which Extendicare will retain a 15% managed interest. Pursuant to the previously announced purchase and sale agreement between Extendicare and the Joint Venture, the Joint Venture acquired four Class C home redevelopment projects, comprising an aggregate of 960 funded LTC beds, currently under construction in Sudbury, Kingston, Stittsville and Peterborough, Ontario (the “JV Homes”).
“The closing of the Axium transaction, coupled with the recent closing of the Revera transaction, marks a significant milestone in Extendicare’s strategic repositioning to a less capital-intensive, higher margin business model to drive growth in our long-term care and home health care segments,” said President and CEO, Dr. Michael Guerriere. “The need to replace aging long-term care infrastructure is a serious issue for the health sector. Our partnership with Axium positions us to build more homes faster, while continuing to advance our mission to provide high-quality care for seniors across Canada,” added Dr. Guerriere.
The estimated proceeds, net of Extendicare’s 15% retained interest, realized on the sale of the JV Homes were approximately $147.3 million, comprised of cash proceeds of $59.3 million, the assumption of construction financing facilities of $72.3 million and certain other liabilities and construction related holdbacks, net of taxes and certain closing costs. The net book value of the property and equipment related to the JV Homes is approximately $135.8 million, resulting in an estimated gain, net of taxes, certain closing costs and other provisions of $8.9 million to be recognized in our third quarter results.
The Company will continue to undertake all development activities in respect of the JV Homes and will provide managed services, through Extendicare Assist and SGP Purchasing Partner Network, to the homes upon completion of construction.
Extendicare is a leading provider of care and services for seniors across Canada, operating under the Extendicare, ParaMed, Extendicare Assist, and SGP Purchasing Partner Network brands. We are committed to delivering quality care throughout the health continuum to meet the needs of a growing seniors population. We operate or provide managed services to a network of 126 long-term care homes and retirement communities (53 owned/73 managed services), provide approximately 9.5 million hours of home health care services annually, and provide group purchasing services to third parties representing approximately 122,785 beds across Canada. Extendicare proudly employs approximately 22,000 qualified, highly trained and dedicated individuals who are passionate about providing high quality care and services to help people live better.
This press release contains forward-looking statements concerning anticipated future events, results, circumstances, economic performance or expectations with respect to Extendicare and its subsidiaries, including, without limitation, statements regarding the Axium transaction and the impact on our business from the Axium transactions. Forward-looking statements can often be identified by the expressions “anticipate”, “believe”, “estimate”, “expect”, “intend”, “objective”, “plan”, “project”, “will” or other similar expressions or the negative thereof. These forward-looking statements reflect Extendicare’s current expectations regarding future results, performance or achievements and are based upon information currently available to us and on assumptions that Extendicare believes are reasonable. Extendicare assumes no obligation to update or revise any forward-looking statement, except as required by applicable securities laws. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied in the statements. For further information on the risks, uncertainties and assumptions that could cause Extendicare’s actual results to differ from current expectations, refer to “Risk and Uncertainties” and “Forward-looking Statements” in Extendicare’s 2022 MD&A and Q2 2023 MD&A filed by Extendicare with the securities regulatory authorities, available at www.sedar.com and on Extendicare’s website at www.extendicare.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on Extendicare’s forward-looking statements.
For further information, please contact:
David Bacon, Senior Vice President and Chief Financial Officer
T: (905) 470-4000