Care Enterprises to Make $25-Million Acquisition
Continuing an aggressive expansion program that has more than doubled its size in two years, Care Enterprises of Laguna Hills said Monday it intends to spend $25 million to acquire Americare Inc., an Ohio-based developer, builder and operator of nursing homes and retirement housing facilities.
The deal would add 26 nursing homes and one retirement development, totaling 2,800 beds, to the 97 nursing homes and one retirement facility Care already operates and would place a total of 13,177 beds under Care’s management.
Acquisition of Americare would make Care the nation’s fifth largest investor-owned operator of skilled nursing care facilities.
Boyd W. Hendrickson, executive vice president of Care, said the company has signed a letter of intent to acquire controlling interest in Americare’s parent, First Ohio Investment Group Inc., for approximately $14 million in cash and shares of Care’s common stock. He declined to say just how much cash is to be paid to the First Ohio principals.
Hendrickson said that once that deal is completed, Care will make a proposal to acquire the remaining interests in Americare and First Ohio from the company’s minority shareholders for approximately $11 million in cash and stock.
The entire $25-million deal, Hendrickson said, is likely to involve cash payments of about $12 million. He declined to specify exact cash and stock breakdowns for the two transactions. He said the entire deal should take about four months to complete and that acquisition of control in Americare is subject to regulatory approval.
Hendrickson said the acquisition of Americare is intended to expand Care’s operations beyond California and Utah. Care also wants the specialized health facilities development and construction company that Americare owns.
Americare owns and has built 21 of the 27 facilities it operates in Ohio, West Virginia, Arizona and New Mexico. Care owns about 20% of the 98 facilities it currently operates, managing the rest under long-term leases.
Went Public in May
In the first nine months of 1984, ended Sept. 30, Care Enterprises reported earnings of $2.4 million, compared to $361,000 for the same period in 1983. Hendrickson said reports of the company’s fourth-quarter and annual results are due in about two weeks.
Care went public in May, 1983, to raise money to finance its expansion. It acquired Casablanca, a San Diego-based operator of 34 nursing homes, in 1983. The next year, Care paid $18.5 million to buy North American Health Care Inc. of Pico Rivera, operator of 25 nursing homes in California and Utah. The same year it also acquired Medisco Inc., of Los Angeles, a company that provides pharmaceutical services to some of Care’s nursing homes.
The proposed Americare acquisition, Hendrickson said Monday, is part of “an ongoing growth program. We are going to do our best to assimilate (Americare) as quick as we can,” he said, “so we can be ready to expand further.”
