CARMEL, Ind. – Mainstreet®, a national company known for real estate development, value investments and health care, announced a strategy today to return to the Canadian public markets through the acquisition of a controlling equity interest in both a Canadian public company and a portfolio of senior care assets. The transaction is part of a long-term strategic plan to assemble a high quality portfolio of seniors care properties.
Mainstreet has entered into a binding letter of intent to acquire a controlling interest in Kingsway Arms Retirement Services (KWA), a publicly traded Canadian real estate company, through a proposed reverse takeover (RTO) transaction. The RTO is subject to, among other things, approval by KWA shareholders at a special meeting to be held in early 2016. Shareholders will be asked to approve several items as part of the overall transaction, including:
- The approval of the RTO, through which KWA will acquire all of Mainstreet’s shares (representing approximately 75 percent of the outstanding shares) of a company that owns 10 senior care housing properties (as described below) in exchange for common shares of KWA.
- The renaming of KWA to Mainstreet Health Investments.
Upon shareholder approval, a new management team and board of directors will be named for Mainstreet Health Investments. The new management team will be comprised of Zeke Turner as chairman and CEO, Scott White as president, Scott Higgs as chief financial officer and Adlai Chester as chief investment officer.
“As Mainstreet continues to transform the seniors care and health care industries, our pace and scale continue to require significant capital,” said Turner, founder and CEO of Mainstreet. “Mainstreet has a proven track record of creating value for shareholders, and we see an opportunity here to recreate that success.”
In addition, Mainstreet acquired a portfolio of 10 senior care housing properties comprised of 2,305 beds in and around the Chicago area. As part of the transaction, Mainstreet intends to acquire an eleventh property in early 2016. Mainstreet intends to further grow the portfolio through development opportunities in and around Chicago. Shareholder approval of the RTO will allow Mainstreet Health Investments to acquire an interest in the portfolio, which is operated by Symphony Post-Acute Network.
Mainstreet Health Investments’ strategy will be growth-oriented, focused on the acquisition of income-producing seniors housing and care properties throughout the United States and Canada. Specifically, the company will look to acquire properties which offer predominately skilled nursing, long-term care and assisted living programs, including short-term rehabilitation and memory care special care units.
“Our mission at Mainstreet continues to be transforming lives,” said White, executive vice president of investments at Mainstreet. “What we’re doing now is building on our previous success in Canada while effecting industry change and growing existing relationships.”
Mainstreet found earlier success in the Canadian public markets through its management of HealthLease Properties REIT (formerly TSX-HLP). Mainstreet formed HLP as a platform to build a portfolio of senior housing properties in the United States and Canada. HLP exceeded expectations, growing from Mainstreet’s initial portfolio of approximately $100 million in 2012 to $950 million in 2014, when Health Care REIT, Inc. (now known as Welltower) acquired it.