Chartwell deal impacts 264 beds as it pulls out of LTC
Chartwell Retirement Residences announced that it entered into agreements to transition, subject to required approvals, its ownership of two Long Term Care homes in British Columbia with 264 beds to AgeCare Health Services Inc. and Axium Infrastructure Inc. and its affiliates.
The combined value of this transaction, before closing costs and customary adjustments, is $112 million with net proceeds to Chartwell after property specific debt, taxes and closing cost is estimated at approximately $56.8 million.
The beds are located in Burnaby and Nanaimo.
“Chartwell’s experienced and dedicated long term care team at these homes has a long and successful history of delivering quality care to our residents” said Vlad Volodarski, Chartwell’s Chief Executive Officer. “Substantial growth in our retirement portfolio over the years and our recently announced transition of the Ontario LTC platform has led us to the decision to sell these LTC residences in British Columbia. It was critical that these properties be sold to a strong and reputable organization which holds similar values to Chartwell to ensure a smooth transition for our residents and employees. Our experience working with AgeCare and Axium as the transition of our Ontario LTC platform furthers strengthened my confidence that they are exactly the right partners to continue the legacy of Chartwell’s long term care operations at these homes. We are committed to work closely with AgeCare, Axium, and all our stakeholders to ensure a smooth and successful transition.”
The purchase price for the two LTC homes before transaction costs and customary adjustments is $112 million. The Purchasers will assume or repay the existing property-specific debt, with an estimated balance at December 31, 2022 of $41.9 million, bearing a weighted average interest rate of 3.25%.
Subject to required approvals, Chartwell expects this transaction to close in 2022.
Chartwell expects, subject to market conditions, to use net proceeds from this transaction, estimated at $56.8 million, to repay credit facilities which have been used to fund growth and developments.