Private Equity firm Carlyle Group is taking Manor Care Inc. private for $6.3 billion, including debt assumption. The buyout price of $67/share is a 20% premium to Manor's stock price in April, when it announced it was exploring a sale. Manor operates more than 500 nursing homes, and also provides home care, predominantly for the elderly. The Wall Street Journal believes Carlyle's primary motivation in buying Manor Care was its large scale and real estate investment potential, meaning that while other nursing home operator buyout deals are possible, the remaining candidates lack Manor Care's advantages. Including after hours trading, Manor Care shares were at breakeven, having shed $1.19 during regular trading, only to gain it back afterwards.
Sources: Press Release, Wall Street Journal, TheStreet.com, Bloomberg, Financial Times, MarketWatch
Commentary: Manor Care: Solid Growth Alternative To Nursing Homes - Barron's • Cold Feet Aside, The Buyout Boom Has Legs
Stocks/ETFs to watch: Manor Care, Inc. (HCR). Competitors: Sun Healthcare Group (SUNH), Genesis HealthCare Corporation (GHCI), Kindred Healthcare (KND). ETFs: PowerShares Dynamic Healthcare Services (PTJ)
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