KMF, Formation Capital and JER Partners Announce Genesis Healthcare Acquisition
July 13, 2007 - KMF Senior Housing principals, Formation Capital and JER Partners announced the acquisition
of Genesis HealthCare Corporation ("Genesis", previously NASDAQ: GHCI). The total enterprise value of the transaction was approximately
$2.0 billion. Pursuant to the terms of amended merger agreement entered into on May 19,2007, Genesis' shareholders received $69.35 in
cash for each share of Genesis' common stock that they held.
"The Genesis portfolio represents a tremendous opportunity to acquire a quality portfolio of skilled nursing
facilities and assisted living residences and to serve the growing demand of elderly Americans for medical and long term care,"
stated Cia Buckley, President of JER's US Fund Business. "We look forward to working with Genesis' management team, which has done
an excellent job of repositioning the business in recent years, to continue executing the strategic initiatives in place."
Arnold Whitman, Chief Executive Officer of Formation and a Principal of KMF Senior Housing Investors further
commented, "Combining a superior management team with a capital partnership that is focused on modernization and enhancement of
care and services to the elderly provides an excellent opportunity for growth in this dynamic industry."
George Hager, Chief Executive Officer of Genesis, added, "We are
pleased to be partnering with firms which understand our business from both a financial and operating standpoint. We have great confidence their strategic
and financial support will enable us to grow and to better serve our patients and residents."
James Smith, Managing Principal of KMF Senior Housing Investors, added, "The principals and senior management team of KMF are
pleased to have made an investment in this company. Genesis is a well-managed firm that has excellent upside potential through
productivity enhancement, physical improvement and expanding operations. The company is ideally positioned to benefit from the
growing demand for senior housing and healthcare services."
Genesis is the fifth-largest provider of skilled nursing services in the United States with a portfolio of 220 skilled nursing
and assisted living facilities totaling over 26,000 beds located primarily in the Mid-Atlantic and Northeast. Genesis generates more
than 90% of its revenue from its skilled nursing and assisted-living services. The remainder arises primarily from a range of
rehabilitation therapy services, including speech pathology, physical therapy, and occupational therapy. In addition, Genesis
offers an array of other specialty medical services, including respiratory health services and physician services.
Genesis offers the largest regional concentration of skilled nursing facilities located in the Northeast, an area with high
occupancy rates and limited new construction due to land scarcity, zoning restrictions and state licensing requirements. In 2006,
the Genesis portfolio generated 48% of its revenues from Medicare and non-public payers and had occupancy of 91%, both figures
are above industry averages.
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