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Mariner Health Care Announces
Completion of Divestiture of Florida Facilities
ATLANTA, GEORGIA October 9, 2003 Mariner Health Care, Inc. (Mariner) (OTCBB: MHCA) announced today that it has closed 19 of the previously announced sale of 20 Florida skilled nursing facilities (SNFs) to an affiliate of Formation Capital, LLC and Longwing Real Estate Ventures, LLC for $86 million. The remaining facility is subject to a joint venture arrangement and Mariner is in continuing discussions with its partner regarding the facility.
The purchase price consists of approximately $73 million in gross cash proceeds and a five-year subordinated promissory note in the approximate amount of $13 million. The net cash proceeds, after transaction costs and retirement of $11.4 million of facility specific mortgage debt, were approximately $52.5 million, which were used to reduce Mariner’s outstanding senior term loan balance to approximately $156.3 million. Mariner was represented by CIBC World Markets Corp. in this transaction.
Mariner is headquartered in Atlanta, Georgia and certain of its subsidiaries and affiliates own and/or operate over 270 skilled nursing and assisted living facilities as well as 12 long-term acute care hospitals representing approximately 34,000 beds across the country.
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Mariner Health Care Announces Agreement to Divest Florida Facilities
ATLANTA – August 15, 2003 – Mariner Health Care, Inc. (“Mariner”) (OTCBB: MHCA) announced today that it has entered into a definitive agreement, with an affiliate (the “Purchaser”) of Formation Capital, LLC and Longwing Real Estate Ventures, LLC, to divest 20 of its Florida skilled nursing facilities (“SNFs”). Under the agreement, the Purchaser will acquire the real estate and certain personal property related to the 20 SNFs. Mariner will receive approximately $92 million as consideration for the 20 facilities.
The consummation of the proposed transaction is expected to occur on or about September 30, 2003, subject to satisfaction of customary closing conditions, including but not limited to, regulatory, governmental and bank approvals.
The purchase price is comprised of approximately $78 million in gross cash proceeds and a $14 million, five-year subordinated promissory note. Mariner expects the net cash proceeds, after transaction costs and retirement of certain mortgage debt, to approximate $65 million, which will be used to reduce its outstanding senior term loan balance. The current outstanding balance under the Mariner senior debt is approximately $209 million.
The Purchaser will lease the 20 Florida SNFs to an affiliate of Sovereign Healthcare Holdings LLC (“Sovereign”), which will operate the SNFs. Sovereign is a recently formed entity involving Mr. William Krystopowicz, President of the newly formed operating entity, and Mr. Darrel Hager, who currently serves as President of Mariner’s Florida subsidiary. The 20 SNFs have 2,502 licensed beds.
Mariner’s Chief Executive Officer, Chris Winkle, commented, “This transaction affords us the opportunity to substantially reduce our exposure to liability insurance costs and litigation risks in the state of Florida and at the same time deleverage the company.”
Mariner is headquartered in Atlanta, Georgia and operates over 290 skilled nursing and assisted living facilities as well as 12 long-term acute care hospitals representing approximately 38,000 beds across the country.
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