HCR, Alternative Living Sign Agreement

Health-care provider HCR ManorCare Inc. said it has forged a strategic alliance with Alternative Living Services Inc. that will enable it to be part of the assisted-living residences business without incurring costly development expenses. In what analysts described as a move that benefits both companies, HCR said it will sell 29 assisted-living and Alzheimer’s patients residences in 12 states to ALI for about $200 million in cash. The deal is expected to close in the first half of the year. The two companies also have agreed to build up to $500 million worth of assisted-living residences in HCR’s core markets. Alternative Living will manage the units, which will operate as Alzheimer’s, dementia-care and assisted-living residences. Brookfield, Wis.-based ALI is the nation’s largest operator of Alzheimer’s/dementia-care residences. Toledo, Ohio-based HCR ManorCare is considered a leading provider of long-term health care and also provides outpatient rehabilitation. ALI’s shares fell $2.06 to close at $31.94 on the American Stock Exchange; HCR ManorCare’s stock gained 75 cents to close at $30.13 on the NYSE.