FORMATION CAPITAL AND JER PARTNERS PRIVATIZE GENESIS HEALTHCARE7/13/2007
Alpharetta, GA – 7/13/2007
Formation Capital and JER Partners announced today they have completed the acquisition of Genesis HealthCare Corporation (“Genesis”, previously NASDAQ: GHCI). The total enterprise value of the transaction was approximately $2.0 billion. Pursuant to the terms of amended merger agreement entered into on May 19, 2007, Genesis’ shareholders received $69.35 in cash for each share of Genesis’ common stock that they held.
“The Genesis portfolio represents a tremendous opportunity for JER and Formation to acquire a quality portfolio of skilled nursing facilities and to serve the growing demand of elderly Americans for medical and long term care,” stated Cia Buckley, President of JER’s US Fund Business. “We look forward to working with Genesis’ management team, which has done an excellent job of repositioning the business in recent years, to continue executing the strategic initiatives in place.”
Arnold Whitman, Chief Executive Officer of Formation further commented, “Combining a superior management team with a capital partnership that is focused on modernization and enhancement of care and services to the elderly provides an excellent opportunity for growth in this dynamic industry.”
George Hager, Chief Executive Officer of Genesis, added, “We are pleased to be partnering with two firms which understand our business from both a financial and operating standpoint. We have great confidence their strategic and financial support will enable us to grow and to better serve our customers”.
Genesis is the fifth-largest provider of skilled nursing services in the with a portfolio of 220 facilities totaling over 26,000 beds located primarily in the Mid-Atlantic and Northeast. Genesis generates more than 90% of its revenue from its skilled nursing and assisted-living services. The remainder arises primarily from a range of rehabilitation therapy services, including speech pathology, physical therapy, and occupational therapy. In addition, Genesis offers an array of other specialty medical services, including respiratory health services, physician services, hospitality services, and staffing services.
Genesis offers the largest regional concentration of skilled nursing facilities located in the Northeast, which is known for its high Medicaid and private pay rates, as well as relatively high occupancy levels. In 2006, the Genesis portfolio generated occupancy of 91% and a quality mix (revenue from Medicare and non-public payers) of 48%, both statistics above industry averages.
###JER Partners is the private equity investment arm of J.E. Robert Companies, a real estate investment management company with more than 26 years of experience in sourcing, underwriting and managing a broad spectrum of real estate equity investments and debt products in North America, Europe and recently the emerging markets. Most of JER’s investments are in office, hospitality, retail, multi-family and industrial properties. Other areas of investment include Commercial Mortgage-Backed Securities (“CMBS”), healthcare related real estate and mezzanine financing. For more information on JER, please visit www.jer.com.
Formation Capital is a private equity firm in the senior housing and long-term care industry. Over the past five years, Formation Capital has completed over $1.5 billion of acquisitions in the sector and provides asset management services to over 250 facilities nationwide. For more information on Formation Capital, please visit www.formationcapital.com.