Extendicare Inc. (TSX: EXE) will split up its U.S. and Canadian businesses, the company announced in its first quarter 2013 results .
The company’s board of directors cited contrasting regulatory environments between the two nations have “long presented challenges to the market.”
“This divergence has been emphasized by the significant change in the U.S. operating environment due to U.S. health care and regulatory reform with its related federal and state spending cuts,” Extendicare said in its first quarter earnings report.
Extendicare’s board is currently reviewing strategic alternatives relating to the separation of its businesses.
Last year, the company appointed a Strategic Committee to focus on this initiative, which is already in the process of evaluating a specific technique of the separation, which it says may take the form of a sale of the U.S. business.
Alternatively, the split could involve a distribution of the Canadian and U.S. businesses, in which shareholders would have the flexibility to participate in two companies. The board expects to complete the process later in the year.
For the first quarter, revenue came in at $497.9 million, a decline of $21.5 million from a year prior, which resulted from the planned exit from Kentucky in 2012.
Written by John Yedinak