- Real estate company Welltower and nonprofit health system ProMedica Health have entered into a joint venture to acquire HCR ManorCare, a large provider of post-acute care and long-term care, and nursing home chain Arden Courts.
- The acquisition from Quality Care Properties would create a $7 billion health system in 30 states offering wellness, assisted living, hospice and home care services.
- HCR ManorCare filed for bankruptcy this March after struggling to make payments on leases due to CMS reimbursement cuts for Medicare and Medicaid, Reuters reported. ProMedica, a 13-hospital system based in Ohio, said it will invest up to $400 million of growth capital over the next five years.
Long-term and home health care operators took center stage within healthcare's merger mania this week.
With large paychecks as well.
Welltower is putting up $1.95 billion for the deal. Earlier this week, Humana, along with private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe, announced an acquisition of hospice operator Curo for $1.4 billion.
The same trio of companies announced in December they would acquire Kindred Healthcare's home health and hospice businesses in a $4.1 billion deal.
As the population ages, healthcare companies are looking in that direction for business opportunities. By 2030, the U.S. Census Bureau projects the percentage of Americans 65 years and older (78 million) will outweigh citizens under the age of 18 (76.4 million), which would be a first in the country's history.
That's a lot of older Americans in need of care. To capture this business, companies have taken varied approaches. For example, Clover Health has focused on only selling Medicare Advantage plans while Landmark Health provides home care to chronically ill elderly patients, regardless of insurer.
The elderly and long-term care spaces will get more competitive in the next five to 10 years as a result of the country's aging.