Manor Care Inc., the largest U.S. operator of homes for the elderly, said on Monday it agreed to be acquired by Carlyle Group for $4.9 billion, becoming the latest health care provider taken off the public market by a private equity buyer.
Manor Care shareholders will receive $67 per share, a 20 percent premium to the stock's closing stock price on April 10, the day before the company announced it was putting itself up for sale.
The total value of the deal, including debt, is $6.3 billion, the company said.
The deal will be financed through a combination of commercial mortgage-backed securities, other debt financing and cash provided by Carlyle.
Private equity firms typically buy companies, cut costs, and sell them later, borrowing around two-thirds of the money needed to finance their deals.
Private equity activity in the health-care sector has accelerated since last year's leveraged buyout of hospital chain HCA Inc. Nursing home chain Genesis HealthCare Corp. agreed to be purchased by private equity buyers in January, and Beverly Enterprises went private in 2005.
The steady cash flows nursing home operators produce is a big attraction for private equity firms that need the cash to pay down borrowed debt.