Genesis HealthCare Corp Acquired
Genesis HealthCare Corp. has agreed to be bought for $1.7 billion. The deal will result in the nursing home company going private.
Formation Capital LLC and JER Partners have formed a joint venture to buy the Kennett Square, Pa., company in an all-cash transaction valued at $63 per share.
The per share price represents a premium of about 31.1 percent over the average closing price for Genesis HealthCare’s common stock (NASDAQ:GHCI) over the past 30 trading days. The sale also includes the assumption of about $450 million in debt.
The deal is subject to shareholder and regulatory approvals as well as other customary closing conditions. Genesis shares closed up 16 percent Tuesday at $61.26.
“After carefully considering GHC’s strategic options, including evaluating proposals from a number of potential industry, strategic and financial buyers, the board concluded that the transaction was in the best interests of the company, including our shareholders and other stakeholders,” said George V. Hager Jr., Genesis chairman and CEO. “This transaction is the result of a thoughtful and comprehensive process, and we are confident that GHC will be able to accelerate achievement of its strategic goals with a partner that has financial resources, understands our business and shares our vision for the future.
“As an independent company operating alongside Formation’s portfolio of health-care companies, GHC will continue to maintain its long-term focus on delivering superior health care to its residents and patients. This transaction is a change in ownership — not a change in direction,” Hager said.
Genesis HealthCare owns and operates more than 200 skilled nursing centers and assisted living residences in 13 Eastern states including Pennsylvania and New Jersey. Genesis also supplies contract rehabilitation therapy to more than 600 health-care providers in 20 states and the District of Columbia.
Formation Capital is a private-equity firm in the senior housing and long-term care industry. It is based in Alpharetta, Ga., and has a local office in Jenkintown, Pa. JER Partners is the private-equity investment arm of J.E. Robert Cos., a real estate investment management company based in McLean, Va.