Leisureworld Completes Portfolio Acquisition

Leisureworld Senior Care Corporation completed its previously announced acquisition of 10 properties in Ontario consisting of 6 long-term care (LTC) homes, two retirement residences and two properties containing both LTC and retirement residence components. The acquisition comprises in total 1,235 LTC beds and 326 retirement suites (the properties), as well as the third party seniors living management business previously operated by Specialty Care Inc. (Management Business).

The acquisition makes Leisureworld the second-largest licensed LTC provider in Ontario, and increases Leisureworld's number of LTC beds by 28 per cent and number of retirement suites by 44 per cent. In addition, 85 per cent of the acquisition's LTC portfolio consists of New or Class A beds, improving Leisureworld's mix of LTC beds.

The Management Business represents a new division of Leisureworld's business, further expanding its offering of services in the seniors housing sector. The total number of LTC beds and retirement suites that Leisureworld now owns and operates, or manages, is 8,359.

The purchase price comprised approximately $218.5 million for the properties and the Management Business, and approximately $33 million for construction funding receivable.

The purchase price was satisfied, in part, by the assumption of approximately $72 million of existing debt and the issuance of 564,516 common shares of Leisureworld to the vendor for $7 million. A further portion of the purchase price was funded from new mortgage loans totaling approximately $63 million, which bear interest at a weighted average rate of 4.1 per cent per annum and have a weighted average term to maturity of approximately 5.8 years. The balance of the purchase price was funded from the net proceeds of Leisureworld's public offering of subscription receipts and extendible convertible unsecured subordinated debentures completed on April 25, 2013. Each outstanding subscription receipt was exchanged for one common share of Leisureworld, resulting in the issuance of 6,353,750 common shares in the aggregate, and a cash dividend equivalent payment of $0.60 per subscription receipt.

Leisureworld was represented in-house by David Veneziano, vice president and general counsel; and externally by Goodmans LLP with a team led by Michelle Roth (corporate/regulatory) and including Bill Gorman, Gail Jaffe, Caroline Wang, Lauren MacLeod and Jennifer Ehrlich (corporate); David Nadler and Ada Ho (finance), Ken Herlin (real estate) and Alan Bowman (tax).

Specialty Care Inc. was represented by Stikeman Elliott LLP with a team including Eric Carmona, Melissa Schyven and Marc Simonik (real estate); Meaghan Obee Tower and Jennifer Charles (banking) and Nancy Ramalho (employment).

Lawyer(s)

Gail Jaffe Alan Bowman Bill Gorman Caroline C.H. Wang Meaghan Obee Tower Melissa Schyven Eric Carmona Michelle Roth David Veneziano Nancy Ramalho Lauren Macleod David J. Nadler Ken Herlin