Leisureworld Senior Care Corporation (TSX:LW) completed the acquisition of two Royalton retirement residences in Kingston and Kanata, Ontario on Thursday.
LW paid $89 million for the two facilities (294 suites total) after working capital adjustments and a holdback of $5.5 million to be held in escrow as an income guarantee to complement cash flow from the properties during the lease-up period said the company.
“As brand new luxury retirement living properties featuring top quality amenities which are competitively positioned in attractive markets, the retirement residences will be marketed under the Company’s ‘The Royale’ brand,” said Leisureworld.
To finance a portion of the purchase, the company entered into a two-year bridge debt facility with a Canadian chartered bank in the amount of $55 million. After putting in place interest rate swap arrangements, the all-in cost of borrowing under the facility will be approximately 4% per annum.
The balance of the purchase price was funded from the net proceeds of the Company’s recently completed public offering of subscription receipts, which raised gross proceeds of approximately $46 million. On closing of the Acquisition, one common share was automatically issued in exchange for each outstanding subscription receipt, resulting in the issuance of 4,381,500 common shares.
Leisureworld owns and operates 26 LTC homes, representing approximately 4,314 beds across Ontario, Canada. In addition, the company also owns and operates three retirement homes with 323 suites and one independent living home with 53 suites.