Extendicare to Expand its Home Health Care Business by Acquiring CBI Home Health for $570 Million in Cash Consideration

Executive Summary

• Extendicare’s wholly‑owned subsidiary ParaMed has signed a definitive agreement to acquire CBI Home Health for a cash purchase price of $570 million plus ~$13.6 million of lease liabilities.
• Simultaneously, Extendicare is conducting a “bought‑deal” private placement of 10.64 million common shares at $18.80 per share, raising approximately $200 million (net ≈$192 M) to partially fund the acquisition.
• The transaction is expected to be accretive: pro‑forma AFFO per share up ~20% and EPS (fully diluted) up ~15%; synergies of $7.4 M annually plus additional $5–7 M long‑term cost savings; post‑deal leverage projected at 3.3× total debt/Adjusted EBITDA.

Key Details

• Acquisition Target: CBI Home Health LP and CBI (GP) 3 Inc., together delivering >10 million care hours annually across seven provinces.
• Purchase Price: $570.0 M cash (subject to customary adjustments) + ~$13.6 M estimated lease liabilities under IFRS 16.
• Financial Profile of Target: FY‑ended July 31 2025 revenue ≈$477.9 M; Adjusted EBITDA ≈$61.9 M (12.9% margin); purchase multiple 9.4× Adjusted EBITDA (8.4× after $7.4 M synergies).
• Synergy Estimates: $7.4 M annual run‑rate IT & cost synergies for the first two years; additional $5–7 M long‑term productivity gains from technology integration.
• Financing Structure:
• Existing senior secured credit facility upsized by $264.5 M (incl. $60 M revolving increase, $204.5 M delayed‑draw term loan).
• New $150 M equity bridge facility to backstop the private placement (to be cancelled/reduced at closing).
• Proceeds from share offering (~$192 M net) earmarked to partially fund the acquisition; remaining cash on hand and credit capacity will cover balance.
• Private Placement Details:
• Underwriters: CIBC Capital Markets (sole bookrunner) & BMO Capital Markets, co‑led syndicate.
• Offered Shares: 10.64 M common shares at $18.80 each → gross proceeds ≈$200 M.
• Offering to accredited investors in Canada and qualified institutional buyers in the U.S. (Rule 144A).
• Expected closing: on or about 3 December 2025, subject to TSX approval and customary conditions.
• Closing Timeline: Acquisition expected to close in Q1 2026, subject to regulatory approvals (Competition Act, Ontario Health at Home, Assisted Living Alberta) and third‑party consents.
• Advisors: CIBC Capital Markets (financial), Torys LLP (legal) for acquisition; Blake, Cassels & Graydon LLP (underwriters’ counsel); TD Securities & Houlihan Lokey (advisors to CBI Home Health).
• Impact on Leverage: Pro‑forma total debt/Adjusted EBITDA projected at 3.3× as of 30 Sept 2025 post‑acquisition.

Notable Quotes

“The combination of ParaMed and CBI Home Health brings together two outstanding teams to enhance access to community‑based care across the country,” – Dr. Michael Guerriere, President & CEO, Extendicare.
“This Acquisition accelerates the growth trajectory of our home health care segment… adding innovative care models … delivering strong value for our customers and shareholders.” – Dr. Michael Guerriere.