HCR Manor Care
Encyclopedia
Toledo, Ohio
Toledo is the fourth most populous city in the U.S. state of Ohio and is the county seat of Lucas County. Toledo is in northwest Ohio, on the western end of Lake Erie, and borders the State of Michigan...
. In July 2007, it agreed to a $4.9 billion buyout offer from the private equity firm Carlyle Group
Carlyle Group
The Carlyle Group is an American-based global asset management firm, specializing in private equity, based in Washington, D.C. The Carlyle Group operates in four business areas: corporate private equity, real assets, market strategies and fund-of-funds, through its AlpInvest subsidiary...
.
Operations
The company operates primarily under the Heartland, ManorCare Health Services and Arden Courts names. In 2006, it earned $167 million on sales of $3.6 billion.As of the end of 2006, the company operated 278 skilled nursing facilities, 65 assisted living facilities, 116 hospice and home health offices, and 92 outpatient therapy clinics, located in 30 states, primarily in Florida, Illinois, Michigan, Ohio, and Pennsylvania. About 73% of its revenue comes from higher-paying Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
and private-pay patients.
As of the end of 2006, the company had approximately 59,500 employees, including part-time employees. About 7,100 employees were salaried; the rest were hourly employees. About 1,400 employees were members of labor unions.
Manor Care - the Bainum years
Manor Care began in 1959, when Stewart Bainum, Sr., a former plumber, opened a nursing home in Wheaton, MarylandWheaton, Maryland
Wheaton is an unincorporated, urbanized area in Montgomery County, Maryland, USA, north of Washington, D.C., northwest of Silver Spring. Wheaton takes its name from Frank Wheaton , a career officer in the United States Army and volunteer from Rhode Island in the Union Army who rose to the rank of...
. The company went public in 1969.
In 1980, the company merged with the hotel company Quality International, later renamed Choice Hotels
Choice Hotels
Choice Hotels International is a hospitality holding corporation which is affiliated with several hotel brands and is based in Silver Spring, Maryland...
, which was also run by Bainum. In 1982, the company acquired nursing home operator Cenco, for $209 million; total facilities were 105, in 19 states. In 1987, Stewart Bainum, Jr., became chairman and CEO, succeeding his father.
In 1992, the company spun off Vitalink Pharmacy Services into a public company with a value of $236 million. In 1996, the company spun off Choice Hotels, refocusing its business on health care.
HCR and Manor Care merger
In 1998, Ohio-based Health Care and Retirement Corporation merged with Manor Care to become HCR Manor Care. The company headquarters was consolidated in Toledo.In September 2002, Stewart Bainum, Jr. retired from the company's board. His term as chairman of the Board had ended a year earlier. In March 2000, he and a management group had made separate offers to buy the company, which the company's board rejected in May 2000; his father retired from the board the same month.
2007 buyout offer
In July 2007, the company agreed to a $4.9 billion buyout offer from the private equity firm Carlyle GroupCarlyle Group
The Carlyle Group is an American-based global asset management firm, specializing in private equity, based in Washington, D.C. The Carlyle Group operates in four business areas: corporate private equity, real assets, market strategies and fund-of-funds, through its AlpInvest subsidiary...
; it will no longer be a publicly traded corporation. Analysts said that Carlyle was interested in the company because it owns, rather than leases, nearly all its own facilities and boasts arguably the best real-estate portfolio in the business, with generally well-maintained, newer facilities in good locations, and little mortgage debt. By borrowing against the property to finance the buyout, Manor Care and Carlyle can carry out the deal on favorable terms. The buyout was completed at $67 per share on December 21, 2007.