Chartwell Completes Sale of its Interests in Ontario Long Term Care Platform

Chartwell Retirement Residences (IR) Logo (CNW Group/Chartwell Retirement Residences)

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: [phone]
Email: [email protected]

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