ProMedica, Welltower, finalize purchase of HCR ManorCare

July 27--Toledo-based health care system ProMedica and real estate investment trust Welltower Inc. said Thursday that they have finalized their joint venture acquisition of Quality Care Properties Inc. and its principal tenant, HCR ManorCare, the nation's second largest operators of skilled nursing homes.

The deal gives Welltower 500 skilled nursing homes and other facilities used by ManorCare. ProMedica now owns ManorCare operations and will become the 15th largest health care system in the country at $7 billion in expected revenues.

Randy Oostra, president and CEO of ProMedica, will be the CEO of the combined organization. Steve Cavanaugh, former CEO of HCR ManorCare, now serves as the president of the HCR ManorCare -- a division of ProMedica.

"This partnership is groundbreaking. Together, we will redefine health care and its role in healthy aging," Mr. Oostra said. "We are focused on tearing down the walls between care delivery channels to provide simpler navigation across the care continuum, along with greater value. Further, we see a tremendous opportunity to engage ProMedica's nationally-recognized, social determinants of health work to benefit seniors across the communities we serve."

Mr. Cavanaugh said, "This relationship is exciting because of all of the opportunities it creates. No other organization in the country offers the breadth of services and capabilities of our combined organizations. We are looking forward to leveraging our resources to create a new way of delivering better care and improving outcomes."

Tom DeRosa, CEO of Welltower, called the partnership between his firm and ProMedica a "transformative" one that will improve health care.

"Together with ProMedica, one of the largest and most innovative health systems in the U.S., this acquisition of HCR ManorCare provides us the platform to think differently about where healthcare services are delivered, particularly with respect to the aging of the population," Mr. DeRosa said.

Shareholders of Quality Care on Wednesday approved the $3.3 billion deal whereby the Maryland-based real estate investment trust and its prize asset, ManorCare, will be acquired by the two Toledo companies.

Welltower bought Quality Care for $20.75 a share, or about $1.95 billion. ProMedica bought the operations of ManorCare for $300 million in cash and assumption of its $1.1 billion worth of debt.

Welltower and ProMedica have formed an 80-20 joint venture, known as Meerkat LLC, to assume ownership of all ManorCare properties. ProMedica is a leasing them back.

ManorCare, which is in Chapter 11 bankruptcy, is expected to exit bankruptcy quickly.

ManorCare operates about 500 assisted living, skilled nursing, and home-health and hospice centers under the ManorCare, Arden Court, and Heartland brand names. It has about 1,700 employees locally and more than 50,000 nationally.

The local employees include about 700 at its 333 N. Summit St. headquarters, located across the street from ProMedica's new downtown headquarters.

Contact Jon Chavez at [email protected] or 419-724-6128.

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