Extendicare sharpens its focus with a big sale

Article Excerpt

Extendicare is now selling its retirement living communities to focus on expanding its long-term care and home health-care segments. That’s where it feels it can best use its expertise and scale to drive future revenue and cash flow. EXTENDICARE INC., $7.63, is a buy. The company (Toronto symbol EXE; TSINetwork Rating: Extra Risk) (www.extendicare.com; Shares o/s: 89.6 million; Market cap: $684.3 million; Dividend yield: 6.3%) has now agreed to sell its retirement living operations—comprised of 1,048 retirement living suites across 11 retirement communities in Ontario and Saskatchewan—to Sienna-Sabra LP. It’s a partnership that formed between Markham, Ontario-based Sienna Senior Living Inc. (symbol SIA on Toronto) and California-based Sabra Healthcare REIT (symbol SBRA on Nasdaq). The purchase price is $307.5 million. Seven of the residences are in Ontario and four in Saskatchewan. While governments have deemed many services non-essential during these turbulent times, there is no question that housing for seniors is vital. With more than 90% of its business now government funded, the company and its shareholders…