TORONTO - Regal Lifestyle Communities Inc. (TSX:RLC) is buying four retirement homes in southern Ontario for $61.8 million.
The purchase from Community Lifecare Inc. and affiliates will be partially financed through a debenture offering of $25 million and $12.5 from a private placement of common shares.
Regal will also arrange or assume approximately $34.5 million of first and second mortgages secured against the portfolio.
"We are pleased to be able to announce a sizable acquisition less than a year after completing our initial public offering," Regal president and CEO Simon Nyilassy said in announcing the deal Thursday.
"These four quality retirement homes are well established in strong markets in Port Perry, Ottawa, London and Chatham, Ont., and will be immediately accretive to Regal's AFFO per share and will lower the company's payout ratio."
The properties are Port Perry Villa in Port Perry (100 suites), Lynwood Park Lodge in Ottawa (142 suits); Grand Wood Park in London (131 suites) and Chatham Retirement Resort in Chatham (173 suites).
The debenture offering, through a syndicate of underwriters co-led by CIBC (TSX:CM) and TD Securities Inc. (TSX:TD), will be for $25 million aggregate principal amount of six per cent convertible unsecured subordinated debentures due Dec. 31, 2018. The debentures will be convertible at the option of the holder into common shares of the company at a price of $9.75 per common share.
Concurrently with the closing of the debenture offering, Regal will issue approximately 1.76 million common shares on a private placement basis to a corporation controlled by Moray Tawse, a director and shareholder of Regal, at $7.10 per common share for total proceeds of some $12.5 million.
Following closing of the debenture offering and private placement, Tawse will hold about 12 per cent of the company common shares.
On the Toronto Stock Exchange, Regal shares closed down 11 cents at $7.01 on Thursday.
Regal currently owns a portfolio of 10 income-producing retirement communities comprising more than 1,400 suites in Saskatchewan, Ontario and Newfoundland and Labrador.
© Copyright 2013