Extendicare Haliburton

Extendicare Announces Completion of Acquisition to Expand its Canadian Home Health Care Business

MARKHAM, ONTARIO – Extendicare Inc. (“Extendicare” or the “Company”) (TSX: EXE) is pleased to announce that the Company has completed the acquisition of the Revera Home Health business from Revera Inc. (the “Vendor”), for $83 million in cash, before working capital adjustments (the “Transaction”).

The Transaction was financed with a bridge loan of approximately $80 million (the “Bridge Loan”) and cash on hand. The Bridge Loan has a term of five months to September 30, 2015, with the option to extend it for a further three months subject to the lender’s consent. The Bridge Loan will be repaid from the proceeds of the previously announced sale of substantially all of Extendicare’s U.S. operations, which is expected to close in the second quarter of 2015. Extendicare management estimates that this acquisition will add approximately $0.10 (annualized) to Extendicare’s AFFO per share in the first year, excluding any temporary financing costs.

Extendicare, through its ParaMed Home Health Care division (ParaMed), is currently the largest private-sector home health care provider in Ontario, providing approximately 5.1 million hours of service annually with approximately 98% of its revenue generated from government contracts. The Transaction brings together two leading Canadian private-sector home health care providers focused on quality, person-centred care and employee satisfaction. Extendicare will rebrand Revera Home Health under its ParaMed banner across six provinces (Ontario, British Columbia, Alberta, Quebec, Manitoba and Nova Scotia).

Tim Lukenda, President and CEO of Extendicare, said that “With the completion of this transaction, we have expanded our platform to be a national provider of home health care services, effectively doubling the number of caregivers, hours of service, and revenue from this segment of our operations. We are excited to welcome the team from Revera and look forward to the opportunities that lie ahead to meet the needs of Canada’s seniors.”

Thomas G. Wellner, President and CEO of Revera, added, “This transaction represents an important strategic milestone for Revera that will support investment in new opportunities; we thank our home health team and are pleased they will continue to lead in the industry under new ownership.”

Lukenda continued by saying, “We believe there is a strong demographic opportunity for home health care in Canada. There’s a growing preference among seniors to age in the home and it is driving demand for home health care services. We are positioning our Company through our ParaMed brand to be a leader in this important segment of the health care continuum. We want to ensure that Extendicare can deliver the right care, at the right time, in the right place for Canada’s growing seniors’ population. This acquisition is a key step in executing on this part of our growth strategy to expand Extendicare’s presence geographically and across the continuum of care.”

RBC Capital Markets acted as financial advisor and Bridge Loan financing provider, and Bennett Jones LLP acted as legal advisor to Extendicare in connection with the Transaction.

TD Securities Inc. acted as financial advisor and Goodmans LLP acted as legal advisor to Revera in connection with the Transaction.