Behind the Buyout:
Facts about the Carlyle Group takeover of HCR ManorCare
Private equity buyout firm: The Carlyle Group, Washington, DC
Company being bought out: HCR ManorCare, Toledo, Ohio
Deal value: $6.6 Billion
Equity financing: $1.3 Million (13%)
Debt financing: $ 5.5 Billion (87%)
Sale price: $67 per share, representing a 20% premium over ManorCare’s stock price on April 10
Deal announced: July 2, 2007
Deal closed: Expected to close by the end of 2007
Fees Reported to Date*:
- $35 Million to JP Morgan for fairness opinion and transaction fee
- $5 Million to Citigroup for fairness opinion
* The Carlyle Group will receive significant fees for arranging the deal: For example, buyout firms typically charge as high as 1% of the value of the transaction for overseeing the transaction, in this case an estimated $60 million. Buyout firms also typically are paid an annual management fee. Information regarding the management fees for this deal, if any, has not yet been made public.
Executive Compensation:
- ManorCare CEO Paul Ormond – Up to $186 million stock payout
- Other ManorCare executives – Up to $68 million combined in stock payouts
About HCR ManorCare
HCR ManorCare, based in Toledo, Ohio, is the largest nursing home provider in the country, with more than 37,000 resident beds nationwide and $3.6 billion in annual revenue.
About the Carlyle Group
With more than $71 billion in assets under management, the Carlyle Group is one of the five largest corporate buyout firms in the nation. Washington, DC-based Carlyle owns companies that together employ more than 280,000 workers. The firm’s three co-founders, David Rubenstein, William Conway, and Daniel D’Aniello each have a net worth estimated by Forbes at more than $2.5 billion. A recent study estimated Rubenstein’s 2006 compensation at $260 million. For more info on the Carlyle Group visit www.BehindtheBuyouts.org/carlyle.