Chartwell Retirement Residences selling 16 Ontario long-term care homes

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Chartwell Retirement Residences says it is selling some long-term care homes and assets while also buying others.

The company said it has signed a deal to sell 16 Ontario long-term care homes as well as its management platform and another home under development to AgeCare Health Services Inc. and Axium Infrastructure Inc. and its affiliates.

The company said the total value of the deal is $446.5 million. The net proceeds to Chartwell after property-specific debt, taxes and closing costs are expected to be about $277 million.

It separately announced plans to acquire three recently developed retirement residences in Ontario with 467 suites on Friday from the entities affiliated with MTCO Holdings.

Read more: Long-term care homes to be built on site of former driving range in Mississauga

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The purchase price before transaction costs and customary closing adjustments is $228 million including a deferred payment of $3 million upon completion of a 132-suite development.

The residences are located in Collingwood, Barrie and Bowmanville and will be rebranded Chartwell Balmoral Retirement Community, Chartwell Allandale Station Retirement Residence and Chartwell Bowmanville Creek Retirement Residence.

“We are pleased to add to our portfolio three modern, high-quality residences located in strong markets where we already have presence and which will allow us to generate meaningful management synergies,” Jonathan Boulakia, Chartwell’s chief investment officer and chief legal officer, said in a news release.

It is Chartwell’s second transaction with MTCO-affiliated companies. In 2015, it purchased three other residences.

Read more: Ontario to provide $673 million to long-term care homes to help with staffing

Earlier Thursday, Chartwell CEO Vlad Volodarski said the sale of 16 long-term care homes was part of the company’s plan to focus on its growing retirement business.

Under the deal, the buyers will acquire the long-term care homes with 2,418 beds. AgeCare will assume management of the homes as well as an additional six homes with 866 beds managed by Chartwell, including two homes with 258 beds that Chartwell will continue to own.

The agreement also includes a 224-bed home in Ajax, Ont., that is under development. AgeCare will assume management of the existing 100-bed home in operation on that site and will acquire the home when the development is complete in the third quarter of 2023.

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The company said the transactions are subject to various government approvals, which are expected to take up to 12 months.

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