Extendicare Announces Closing of Transaction with Axium

Formation of a joint venture to support long-term care redevelopment and sale of four projects currently under construction into the joint venture

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.