Chartwell Retirement Residences announced it has entered into an agreement to substantially exit the long-term care home business in Ontario, Canada with an agreement to sell 16 LTC homes to AgeCare Health Services Inc. and Axium Infrastructure Inc. There are several parts of the transaction, with the most significant being the sale of 16 homes with 2,418 beds for C$382 million, or about C$158,000 per bed. This equates to US$126,400 per bed. The facilities range in size from 64 beds to 235 beds, with the majority over 150 beds. All of these are located in Ontario, and all were owned by Chartwell.
Next up is the sale of an existing care home with 100 beds currently in operation, with an additional 124 beds under development. When completed, the sale price will be C$64.5 million for the 224-bed facility, or C$288,000 per bed. The buyers will take over management of the 100 beds before the acquisition is completed.
The final piece involves the transfer of the management of six care homes with 866 beds to AgeCare. Two of these facilities are currently owned by Chartwell and all six are currently managed by Chartwell. All of these transactions will take up to12 months to obtain various governmental approvals (and you thought the U.S. was bad), which should not be a problem.
AgeCare Health Services was founded in 1998 by two physicians and currently operates 22 long-term care and supportive living communities in Alberta and British Columbia. Axium Infrastructure is a portfolio management company with approximately C$7.9 billion in assets under management, as well as C$1.7 billion in co-investments.
Once the transactions are completed, Chartwell will be almost 100% out of the care home business (4%), and concentrate on its retirement community, assisted living and memory care businesses.
