Extendicare Completes Acquisition of Closing the Gap Healthcare Group
MARKHAM, Ontario — Extendicare Inc. has successfully concluded the acquisition of Closing the Gap Healthcare Group Inc., further enhancing its home healthcare services. This strategic move, completed by its subsidiary ParaMed Inc., was executed on a debt-free, cash-free basis, with an aggregate cash consideration of $75.5 million. This acquisition, announced recently, positions Extendicare to better meet the growing demand for quality healthcare services.
Financial Aspects of the Acquisition
Under the terms of the agreement, the purchase price is subject to customary adjustments based on working capital. Additionally, there is a potential earnout between $3.5 million to $5.5 million applicable after the first year post-closing, tied to revenue generated from new business. The funding for this acquisition was secured through existing cash resources and senior secured credit facilities.
Dr. Guerriere’s Vision for Extendicare
“We are delighted to welcome the talented team from Closing the Gap into our Extendicare family,” stated Dr. Michael Guerriere, the President and CEO. He emphasized that their strong expertise in rehabilitation and integrated care will greatly complement Extendicare’s existing offerings, enabling the company to fulfill the increasing health care needs of Canadians more effectively.
Enhancing Financial Flexibility
Alongside the acquisition, Extendicare announced a $100 million increase to its Senior Secured Credit Facility, raising its total to $375 million. This capital increase includes an additional $55 million to the delayed draw term loan facility and $45 million to the revolving credit facility. Dr. Guerriere noted that this financial backing positions Extendicare well for future strategic growth and acquisition opportunities.
Advisors in the Transaction
Torys LLP served as the legal advisor for Extendicare, while Financial advisory services for Closing the Gap were provided by Origin Merchant Partners. Aird & Berlis LLP acted as the legal advisor for Closing the Gap throughout the acquisition process.
Commitment to Quality Care
Extendicare is recognized as a leading provider of long-term care and home-based healthcare services in Canada. Operating under several brand names including ParaMed and Extendicare Assist, the company manages a wide network of 99 long-term care homes and provides over 11.2 million hours of home health services annually. With approximately 27,500 committed employees, Extendicare is dedicated to helping seniors lead better lives and receive the quality care they deserve.
The Impact of the Acquisition
The integration of Closing the Gap is expected to enhance Extendicare’s service offerings and create synergistic opportunities that will foster growth. This acquisition reaffirms Extendicare’s commitment to expanding its capabilities in the healthcare sector.
Frequently Asked Questions
What is the significance of Extendicare's acquisition of Closing the Gap?
This acquisition strengthens Extendicare's presence in the home healthcare market, allowing for enhanced service offerings and better addressing the needs of seniors.
What financial benefits come from this acquisition?
The acquisition is expected to provide additional revenue through the earnout structure while leveraging enhanced credit facilities for strategic growth.
How does Closing the Gap complement Extendicare?
Closing the Gap brings valuable expertise in rehabilitation services, which aligns with Extendicare's mission to provide integrated care models.
What are Extendicare’s future plans following this acquisition?
Extendicare aims to capitalize on improved financial flexibility to pursue additional strategic acquisitions and expand its service network across Canada.
Who can I contact for more information about Extendicare?
You can reach out to David Bacon, the Executive Vice President and Chief Financial Officer, for further inquiries.
