Manor Care deal is latest in Carlyle's buyout spree

The global private equity firm, Carlyle Group, announced Monday that it will acquire Manor Care Inc., the operator of nursing homes and assisted-living centers, for approximately 6.3 billion dollars, including debt.

The potential Carlyle bid, at $67 per common share in cash, represents a 20 percent premium to Manor Care's closing price of $55.75 a share on April 10, 2007, the day before the company announced it would evaluate strategic alternatives. The buyout price also represents a premium of 2.6 percent over the shares' close Friday.

"This transaction affords a significant cash premium to our shareholders while allowing the company to continue its strategic direction and commitment to quality care," Paul A. Ormond, Manor Care's chief executive officer, Chairman and President, said in a statement.

The Board of directors of the company has given its node to the transaction with The Carlyle Group to take the company private in an all cash transaction.

"The Board of Directors and our financial advisors thoroughly evaluated a wide range of strategic alternatives to maximize shareholder value," added Ormond.

The Carlyle/Manor Care merger deal, which still requires approval of company's shareholders, receipt of necessary regulatory approvals, and fulfillment of other usual and customary closing conditions, is expected to close during the fourth quarter of this year.

Carlyle’s acquisition of Toledo, Ohio-based holding company for health care businesses is the latest in company’s acquisition spree.

Two weeks ago, Carlyle teamed with two private-equity firms Bain Capital LLC and Clayton, Dubilier & Rice Inc. to snap up Atlanta-based Home Depot's wholesale construction supply business for $10.3 billion. Last week, Washington-based private equity firm Carlyle, and Toronto-based investment conglomerate Onex bought General Motors Corporation’s Allison Transmission (Allison) commercial and military business for about US$5.6 billion.

Recently, Carlyle has approached Virgin Media Inc., the United Kingdom cable operator, with a preliminary bid worth $20 billion in cash, including debt. If the deal matures, it could be among the largest ever in Britain. In order to see its bid thrive, Carlyle will have to settle things with Virgin Media's largest shareholder, Sir Richard Branson, who holds a 10.5% stake in the company. Sir Richard reportedly wants to keep hold of a stake in the business.

Manor Care, which started with a single nursing home in Wheaton 48 years ago, has become the lord of the manor in the nursing home kingdom. With nearly 60,000 employees in more than 500 skilled nursing and rehabilitation facilities under the Heartland, ManorCare Health Services and Arden Courts brands, Manor Care has grown into one of the largest providers of short-term post-acute services and long-term care and services in the country.

The Carlyle Group, which is a global private equity firm with $58.5 billion under management, employs more than 800 people in 18 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world.

Run by Louis Gerstner, the former IBM chairman, Carlyle has been increasingly making investments in the semiconductor province. The firm has invested $28.3 billion of equity in 636 transactions for a total purchase price of $132.0 billion since 1987.

Last year in September, the firm announced it was part of a consortium that was taking over Austin, Texas-based chip-designer Freescale Semiconductor for $17.6 billion.

The funds managed by The Carlyle Group, the leading provider of semiconductor packaging services also own Jazz Semiconductor, a Newport Beach, California based pure-play semiconductor wafer foundry, and the leading global supplier of electronic materials, AZ Electronic Materials.