Mainstreet Health Investments Completes Previously Announced Portfolio Sale-Leaseback Transaction with The Ensign Group, Inc.

TORONTO, May 15, 2017 /CNW/ - Mainstreet Health Investments Inc. (TSX: HLP-U) ("Mainstreet" or the "Company") is pleased to announce the completion of the previously announced sale-leaseback transaction with affiliates of The Ensign Group, Inc. (NASDAQ: ENSG) of a portfolio of three stabilized assisted living and post-acute care facilities located in Arizona and California.

Acquisition Highlights

  • High Quality Portfolio: Mainstreet acquired one facility in Glendale, Arizona and two facilities in Rosemead, California for US$38 million. The property in Glendale, Arizona provides long term and transitional care services while the properties in Rosemead provide combined assisted living and transitional care services.
  • Leading Operating Partner: Each facility is leased to a subsidiary of The Ensign Group, Inc. under a 20-year triple net master lease and the leases are guaranteed by The Ensign Group, Inc. The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, and other rehabilitative and healthcare services at 215 healthcare facilities, twenty hospice agencies, eighteen home health agencies and three home care businesses across fourteen states.
  • Enhanced Diversification: The acquisition further expands Mainstreet's geographic and property-type diversification.
  • Strong Financing Structure: The transaction was financed using a combination of balance sheet cash and portfolio-level indebtedness.
  • Immediately Accretive Transaction: The acquisition is expected to be immediately accretive to the Company's Adjusted Funds from Operations ("AFFO") per share.

"These acquisitions further demonstrate our strategy to grow with solid operating partners," said Mainstreet Chief Executive Officer, Scott White. "We are thrilled we could structure a deal that was beneficial to Ensign's growth objectives, while providing substantial enhancement to our portfolio. This transaction is a real win for all parties."

Description of the Communities

The communities, located in Glendale, Arizona and Rosemead, California, were acquired for an aggregate purchase price of US$38 million. The communities are leased to subsidiaries of Ensign under a triple net master lease, with CPI-based annual escalators.

The following table provides a summary description of the Communities:

Property

City

State

Building Size
(Sq. Ft.)

Total Units

California Mission Inn

Rosemead

California

126,944

144

Mission Care Center

Rosemead

California

14,936

58

Horizon Post-Acute

Glendale

Arizona

61,610

179

Total



203,490

381

 

About Mainstreet Health Investments Inc.

Mainstreet Health Investments Inc. is a health care real estate company with a portfolio of high quality properties located in the United States and Canada. Our properties are operated by best-in-class health care providers primarily under long-term, triple net leases. Our mission is to create long-term shareholder value while providing an investment opportunity that matters. For more information visit www.mainstreethealthinvestments.com.

About EnsignTM:  

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, and other rehabilitative and healthcare services at 215 healthcare facilities, twenty hospice agencies, eighteen home health agencies and three home care businesses across fourteen states. More information about Ensign is available at http://www.ensigngroup.net.

Non-IFRS Financial Measures

AFFO is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. AFFO is presented in this news release because management of the Company believes that it is relevant in interpreting the purchase price metrics and performance of acquisitions. Such measure, as computed by the Company, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to the measures reported by such other organizations. Please see the Company's most recent management's discussion and analysis for how the Company reconciles AFFO to the nearest IFRS measure.

Forward-looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may" "estimate", "pro forma" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the benefits of the acquisition (including the extent it will be accretive to the Company's AFFO per share).  The forward-looking statements in this news release are based on certain assumptions. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the Company's annual information form available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Mainstreet Health Investments Inc.

For further information: Investor Relations: 1-317-582-6971, ir@mainstreethealthinvestments.com


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