Lee Equity Partners and Coastwood Senior Housing Partners have agreed to make a major investment in a recapitalization of Discovery Senior Living, one of the nation’s largest operators.
The Oct. 2 transaction, which was announced Wednesday, is part of a new venture to support the expansion of Discovery Senior Living’s national portfolio.
Discovery did not disclose financial terms of the transaction. If all goes according to plan, the deal is expected to clear in 4Q22.
Discovery Senior Living owns and operates 110 communities in 19 states and is ranked as the eighth-largest operator in Argentum’s most recent Top Provider list.
The recapitalization is meant to fund Discovery’s expansion and evolution as a company heading into 2023. The partnership will also expand Discovery’s national and regional brand management structure and enhance its Experiential Living operating programs.
More specifically, the recap will serve as the “next stage” in the expansion of Discovery’s brand management structure. It also will help to fuel more enhancement of the operator’s experiential living operating programs.
Discovery CEO Richard Hutchinson said the partnership will accelerate Discovery’s vision of “creating a scaled company.”
“I could not be more enthusiastic about pushing forward with the natural evolution of our company and industry and believe we will continue to attract the absolute most forward-thinking owners, capital partners and individuals who want to be a part of our dynamic culture and the future of our industry,” Hutchinson said in a news release regarding the transaction.
Coastwood Senior Housing Partners Chairman Dan Decker will as part of the deal assume the role of chairman of the Discovery Senior Living board of directors. This is not the first time he has taken on such a role. In 2015 he was appointed as board chair at Brookdale Senior Living (NYSE: BKD).
Decker noted that Discovery brings its “highly scalable platform” to the arrangement, while Coastwood adds its investment experience and Lee Equity brings to the table its health care and business services..
“We are excited to combine our capabilities to lead the industry with improved quality of care, technology innovation, and data-driven outcomes,” Decker said in the news release.
All of the Discovery family of companies are included in the deal. They include: Discovery Management Group, Morada Senior Living, TerraBella Senior Living, Discovery Development Group, Discovery Design Concepts, Discovery Marketing Group, and Discovery At Home, a Medicare-certified home healthcare company.
The operator is not the first major senior living company to recapitalize in 2022. Des Moines, Iowa-based LCS undertook a similar effort with Redwood Capital Investments, McCarthy Capital and LCS employee shareholders.
Discovery has been on a growth push in recent months and years. The company in January continued its expansion as part of a 10-property acquisition with White Oak Healthcare REIT. Discovery also this year has deepened its relationship with other companies, including REIT NHI.
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