Formation Capital and JER Partners Acquire Genesis HealthCare

Jul 13, 2007, 01:00 ET from JER Partners

    ALPHARETTA, Ga., July 13 /PRNewswire/ -- Formation Capital and JER
 Partners announced today they have completed the acquisition of Genesis
 HealthCare Corporation ("Genesis", previously NASDAQ:   GHCI). The total
 enterprise value of the transaction was approximately $2.0 billion.
 Pursuant to the terms of amended merger agreement entered into on May 19,
 2007, Genesis' shareholders received $69.35 in cash for each share of
 Genesis' common stock that they held.
     "The Genesis portfolio represents a tremendous opportunity for JER and
 Formation to acquire a quality portfolio of skilled nursing facilities and
 assisted living residences and to serve the growing demand of elderly
 Americans for medical and long term care," stated Cia Buckley, President of
 JER's US Fund Business. "We look forward to working with Genesis'
 management team, which has done an excellent job of repositioning the
 business in recent years, to continue executing the strategic initiatives
 in place."
     Arnold Whitman, Chief Executive Officer of Formation further commented,
 "Combining a superior management team with a capital partnership that is
 focused on modernization and enhancement of care and services to the
 elderly provides an excellent opportunity for growth in this dynamic
     George Hager, Chief Executive Officer of Genesis, added, "We are
 pleased to be partnering with two firms which understand our business from
 both a financial and operating standpoint. We have great confidence their
 strategic and financial support will enable us to grow and to better serve
 our patients and residents."
     Genesis is the fifth-largest provider of skilled nursing services in
 the United States with a portfolio of 220 skilled nursing and assisted
 living facilities totaling over 26,000 beds located primarily in the
 Mid-Atlantic and Northeast. Genesis generates more than 90% of its revenue
 from its skilled nursing and assisted-living services. The remainder arises
 primarily from a range of rehabilitation therapy services, including speech
 pathology, physical therapy, and occupational therapy. In addition, Genesis
 offers an array of other specialty medical services, including respiratory
 health services and physician services.
     Genesis offers the largest regional concentration of skilled nursing
 facilities located in the Northeast, an area with high occupancy rates and
 limited new construction due to land scarcity, zoning restrictions and
 state licensing requirements. In 2006, the Genesis portfolio generated 48%
 of its revenues from Medicare and non-public payers and had occupancy of
 91%, both figures above industry averages.
     JER Partners is the private equity investment arm of J.E. Robert
 Companies, a real estate investment management company with more than 26
 years of experience in sourcing, underwriting and managing a broad spectrum
 of real estate equity investments and debt products in North America,
 Europe and recently the emerging markets. Most of JER's investments are in
 office, hospitality, retail, multi-family and industrial properties. Other
 areas of investment include Commercial Mortgage-Backed Securities ("CMBS"),
 healthcare related real estate and mezzanine financing. For more
 information on JER, please visit
     Formation Capital is a private equity firm in the senior housing and
 long- term care industry. Over the past five years, Formation Capital has
 completed over $1.5 billion of acquisitions in the sector and provides
 asset management services to over 250 facilities nationwide. For more
 information on Formation Capital, please visit