MISSISSAUGA, ON, Sept. 6,
2023 /CNW/ - September 6,
2023 – Chartwell Retirement Residences ("Chartwell") (TSX:
CSH.UN) announced today that it has completed the previously
announced sale of its ownership of 16 Ontario Long Term Care
("OLTC") homes with 2,418 beds to Age Care Health Services Inc. and
its affiliates ("AgeCare") and a fund managed by Axium
Infrastructure Inc. and its affiliates ("Axium"). Chartwell's
OLTC management platform, which serves 23 owned and managed homes
with 3,384 beds has also been sold to AgeCare. Chartwell expects
that AgeCare and Axium (collectively the "Purchasers") will
acquire, under a forward purchase agreement, another OLTC home with
224 beds, upon completion of its development, expected to occur in
the first half of 2024. The combined gross sale price of these
transactions, before closing costs, taxes and working capital and
other customary adjustments, is $443.2
million.
"We greatly appreciate the legacy that Chartwell's experienced
and dedicated Ontario long term
care team has created in delivering quality care to our residents,
as evidenced by quality indicators consistently exceeding
provincial averages, and a culture of continuous improvements
through innovative programs like 'Imagine'. I am confident that
they will carry this legacy to the future as part of the AgeCare
team," said Vlad Volodarski,
Chartwell's Chief Executive Officer. "Thank you to the Chartwell,
Age Care and Axium teams for executing on this complex transaction
and for working tirelessly to ensure a smooth transition for our
residents, families, and employees."
"Our Vision is to transform and lead quality, services and
innovation in the LTC sector in Canada. With this acquisition we will inherit
talent that will allow us to strive toward our Vision," said Dr.
Hasmukh Patel, AgeCare's President
and Chief Executive Officer.
Transaction Details
The Purchasers have acquired 16 OLTC homes with 2,418 beds, of
which 2,124 are Class A and 219 are Class C, and 75 retirement
suites in two of the residences (the "Acquired Homes"). AgeCare
will assume management of the Acquired Homes as well as an
additional six homes with 866 beds currently managed by Chartwell,
including two homes with 258 beds which Chartwell will continue to
own (the "Management Business" and collectively with the "Acquired
Homes" – the "Acquired Business"). Refer to Appendix A at the end
of this release.
The gross sale price of the Acquired Business is $378.7 million. Net proceeds, after property
specific debt, working capital adjustments, transaction costs and
taxes is estimated to be $148.9
million which will be used to pay down amounts outstanding
on Chartwell's secured credit facility. As a result of this sale,
the majority of 2023 distributions to Chartwell unitholders are
expected to be classified as eligible dividends.
The parties are subject to a forward purchase agreement for the
224-bed Ballycliffe OLTC home in Ajax,
Ontario, currently under development. Under the terms of the
forward purchase agreement, the Purchasers will acquire this home
upon completion of its development, expected in the first half of
2024, for $64.5 million.
About Chartwell
Chartwell is in the business of serving and caring for
Canada's seniors, committed to its
vision of Making People's Lives BETTER and to providing a happier,
healthier, and more fulfilling life experience for its residents.
Chartwell is an unincorporated, open-ended real estate trust which
indirectly owns and operates a complete range of seniors housing
communities, from independent living through to assisted living and
long term care. Chartwell is the largest operator in
Canada, serving over 25,000
residents in four provinces across the
country. For more information, visit
chartwell.com.
About Axium Infrastructure Inc.
Axium Infrastructure (comprised of Axium Infrastructure Inc.
and its affiliated entities) is an independent portfolio management
firm dedicated to generating long-term investment returns through
investing in core infrastructure assets. Axium Infrastructure had
over C$10.8 billion in assets under
management as of June 30, 2023, as
well as approximately C$1.8 billion
in co-investments. With offices in Montreal, Toronto, Vancouver, New
York, and London, the firm
benefits from the capabilities of a group of specialists with
decades of experience acquiring, developing, financing, operating,
and managing infrastructure assets. Focus is placed on assets that
are supported by robust market demand and under long-term contract
with creditworthy counterparties. Since 2010, the firm has invested
in a diversified portfolio of over 260 infrastructure assets. For
further information, including information about other
infrastructure assets the firm has invested in, please visit
www.axiuminfra.com.
About AgeCare
Founded in 1998, AgeCare is dedicated to providing seniors
housing options based on a "living in place" philosophy. The
company is deeply committed to creating vibrant seniors communities
that celebrate and support aging with dignity, independence and
community interaction. AgeCare currently operates 31 continuing
care communities in Alberta
and British Columbia. AgeCare
offers high-quality resident-centred care, programs,
amenities and services through their long-term care, retirement
living, supportive living, memory care, mental health, hospice, and
adult day programs. For more information, visit
www.agecare.ca.
Forward-Looking Information
This press release contains forward-looking information that
reflects the current expectations, estimates and projections of
management about the future results, performance, achievements,
prospects or opportunities for Chartwell and the seniors housing
industry. Forward-looking statements are based upon a number of
assumptions and are subject to a number of known and unknown risks
and uncertainties, many of which are beyond our control, and that
could cause actual results to differ materially from those that are
disclosed in or implied by such forward-looking statements.
Examples of forward-looking information in this document include,
but are not limited to, statements regarding our business
strategies, including targets, and the expected results of such
strategies, predictions and expectations with respect to industry
trends regarding senior population growth, long term care bed
shortages and the slow down of new construction starts,
expectations with respect to taxes that are expected to be payable
in future years and statements regarding the tax classification of
distributions, and occupancy rate forecasts. There can be no
assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ
materially from those expected or estimated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking information. These factors are more fully described
in the "Risks and Uncertainties and Forward-Looking Information"
section in our Management's Discussion and Analysis for the year
ended December 31, 2022 (the "2022
MD&A"), and in materials filed with the securities regulatory
authorities in Canada from time to
time, including but not limited to our most recent Annual
Information Form (the "AIF"). A copy of the 2022 MD&A, the AIF
and Chartwell's other publicly filed documents can be accessed
under Chartwell's profile on SEDAR+ at
www.sedarplus.ca.
For more information, please contact:
Chartwell Retirement Residences
Vlad Volodarski, Chief Executive
Officer
Tel: (905) 501-9219
Email: investorrelations@chartwell.com
Appendix A – Acquired Business
Transaction: Being acquired by Axium and managed by
AgeCare
#
|
Home Name
|
Location
|
Current Chartwell
Owned / Managed
|
Current
Ownership
interest
|
Class A
|
Class B
|
Class C
|
Retirement
Suites
|
Total
Suites/Beds
|
1
|
Pine Grove Long Term
Care & Retirement Residence
|
Woodbridge,
ON
|
Owned
|
100 %
|
96
|
|
|
11
|
107
|
2
|
Royal Oak Long Term
Care
|
Kingsville,
ON
|
Owned
|
100 %
|
160
|
|
|
|
160
|
3
|
London Long Term
Care
|
London, ON
|
Owned
|
100 %
|
95
|
|
|
|
95
|
4
|
Parkhill Long Term
Care
|
Parkhill, ON
|
Owned
|
100 %
|
64
|
|
|
|
64
|
5
|
Aylmer Long Term
Care
|
Aylmer, ON
|
Owned
|
100 %
|
64
|
|
|
|
64
|
6
|
Trilogy Long Term
Care
|
Scarborough,
ON
|
Owned
|
100 %
|
197
|
|
|
|
197
|
7
|
Brant Centre Long Term
Care
|
Burlington,
ON
|
Owned
|
100 %
|
175
|
|
|
|
175
|
8
|
Waterford Long Term
Care
|
Oakville, ON
|
Owned
|
100 %
|
168
|
|
|
|
168
|
9
|
Wenleigh Centre Long
Term Care
|
Mississauga,
ON
|
Owned
|
100 %
|
161
|
|
|
|
161
|
10
|
Westbury Centre Long
Term Care
|
Etobicoke,
ON
|
Owned
|
100 %
|
187
|
|
|
|
187
|
11
|
Westmount Centre Long
Term Care
|
Kitchener,
ON
|
Owned
|
100 %
|
160
|
|
|
|
160
|
12
|
Willowgrove Centre Long
Term Care
|
Ancaster, ON
|
Owned
|
100 %
|
169
|
|
|
|
169
|
13
|
Woodhaven Centre Long
Term Care
|
Markham, ON
|
Owned
|
100 %
|
192
|
|
|
|
192
|
14
|
Wynfield Centre Long
Term Care
|
Oshawa, ON
|
Owned
|
100 %
|
172
|
|
|
|
172
|
15
|
Elmira Long Term Care
& Retirement Residence
|
Elmira, ON
|
Owned
|
100 %
|
|
|
48
|
64
|
112
|
16
|
Aurora Long Term
Care
|
Aurora, ON
|
Owned
|
100 %
|
64
|
|
171
|
|
235
|
|
Sub
total
|
|
|
|
2,124
|
|
219
|
75
|
2,418
|
Transaction: To be managed by AgeCare
#
|
Home Name
|
Location
|
Current Chartwell
Owned / Managed
|
Current
Ownership
interest
|
Class A
|
Class B
|
Class C
|
Retirement
Suites
|
Total
Suites/Beds
|
1
|
Gibson Long Term
Care
|
North York,
ON
|
Owned
|
100 %
|
|
|
202
|
|
202
|
2
|
White Eagle Long Term
Care
|
Toronto, ON
|
Owned
|
100 %
|
|
56
|
|
|
56
|
3
|
Cawthra Gardens Long
Term Care
|
Mississauga,
ON
|
Managed
|
0 %
|
192
|
|
|
|
192
|
4
|
Regina Gardens Long
Term Care
|
Hamilton, ON
|
Managed
|
0 %
|
128
|
|
|
|
128
|
5
|
Queens Gardens Long
Term Care
|
Hamilton, ON
|
Managed
|
0 %
|
128
|
|
|
|
128
|
6
|
Villa Forum Long Term
Care
|
Mississauga,
ON
|
Managed
|
0 %
|
160
|
|
|
|
160
|
|
Sub
total
|
|
|
|
608
|
56
|
202
|
|
866
|
Transaction: Forward Purchase Agreement with Axium and managed by
AgeCare
#
|
Home Name
|
Location
|
Current Chartwell
Owned / Managed
|
Current
Ownership
interest
|
Class A
|
Class B
|
Class C
|
Retirement
Suites
|
Total
Suites/Beds
|
1
|
Ballycliffe Long Term
Care - development 1
|
Ajax, ON
|
Owned
|
100 %
|
224
|
|
|
|
224
|
Footnote:
|
1 Current Ballycliffe
home with 100 Class C Beds will remain operational and managed by
AgeCare for the duration of development activity.
|
SOURCE Chartwell Retirement Residences