08:22 AM EST, 11/28/2024 (MT Newswires) -- Extendicare ( EXETF ) , which rose 2% to near 52 week highs yesterday, on Thursday said it will acquire nine Class C long-term care (LTC) homes in Ontario and Manitoba and one parcel of vacant land in Ontario for $60.3 million in cash.

The transaction with Revera is subject to regulatory approvals from the Ontario and Manitoba health authorities, and is not conditional on financing or due diligence. Extendicare ( EXETF ) already manages the nine homes it will acquire.

The transaction, which is expected to close in the middle of next year, would add $124 million and $13 million in annualized revenue and net operating income respectively, to Extendicare's ( EXETF ) LTC segment

A third party has also agreed to acquire 21 of Revera's Class C LTC homes in Ontario that are currently managed by Extendicare ( EXETF ). Upon closing of the two transactions, Extendicare's ( EXETF ) management agreements with Revera for the 30 homes, and related redevelopment arrangement agreements, will terminate.

"This transaction adds approximately 1,100 beds to our redevelopment pipeline, giving us control of the redevelopment process for these homes," said Dr. Michael Guerriere, president and CEO. "Although we have generally avoided purchasing Class C homes, this was a unique opportunity as net operating income from the acquired homes more than offsets the reduction in management fees, and the opportunity to sell seven operational retirement homes once LTC redevelopment is complete makes it likely we will recover most of the purchase price."