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Senior Dwelling Large LCS Recapitalizes With Redwood, McCarthy, Worker Homeowners

Share this…FacebookPinterestTwitterLinkedin Des Moines, Iowa-based senior dwelling large LCS has accomplished a deliberate recapitalization. LCS introduced the recap in the…

By Staff , in Senior Living , at January 3, 2022



Des Moines, Iowa-based senior dwelling large LCS has accomplished a deliberate recapitalization.

LCS introduced the recap in the present day however didn’t publicly disclose monetary phrases. The recap brings Redwood Capital Investments in as a brand new investor and renews the possession pursuits of McCarthy Capital and LCS worker shareholders.

LCS was based in 1971 and final recapitalized in 2010. At the moment, the board deliberate to recap once more inside about 10 years, so this transaction makes good on these intentions, LCS President and CEO Joel Nelson informed Senior Housing Information.

“LCS has positioned itself for the following 50 years of serving seniors — that’s what that is all about,” Nelson informed SHN.

LCS is the second-largest senior dwelling operator in the US, with its Life Care Providers portfolio encompassing greater than 35,000 items throughout 135 communities, in keeping with the 2021 rankings from trade affiliation Argentum. Along with being an working firm, the LCS Household of Corporations contains varied different enterprise traces, together with a growth arm, a consulting service, and an actual property non-public fairness enterprise, in addition to a nonprofit basis.

The recap provides Redwood Capital an possession stake in two of the biggest U.S. senior dwelling suppliers, because the agency acquired Catonsville, Maryland-based Erickson Senior Dwelling in 2010.

LCS and Erickson will function independently of one another and “preserve their distinct and separate manufacturers,” in keeping with a press launch issued by LCS.

Redwood is a diversified holding firm with a portfolio of 16 companies throughout a number of industries, with a give attention to founder-, family- and management-owned firms. The agency acquired Erickson out of chapter. It’s the household workplace of Jim Davis, who co-founded world expertise administration agency Allegis Group.

Omaha, Nebraska-based McCarthy manages greater than $3 billion of capital, and sometimes targets investments of between $15 million and $75 million. Its portfolio contains medical staffing, an institutional pharmacy serving assisted dwelling and long-term care communities, and an organization that gives funding evaluation and different instruments to company actual property traders.

Worker possession of LCS dates again to founder Fred Weitz’s formation of an worker inventory possession plan (ESOP); when Weitz retired in 1995, workers grew to become eligible to change into direct shareholders. All worker shareholders voted to approve the most recent recapitalization plan, Nelson stated.

By sustaining worker possession, LCS stays an instance {that a} rising variety of senior dwelling suppliers may begin to emulate. Different suppliers even have made strikes to extend worker possession or profit-sharing, partially to assist drive engagement and retention.

The recap will assist LCS’ technique of rising its actual property possession, strengthen its third-party administration and ancillary enterprise traces, and allow funding in “folks and development initiatives” to assist companies to older adults, in keeping with Monday’s press launch.

Like different senior dwelling suppliers, LCS incurred elevated bills over the past two years, because of the results of the Covid-19 pandemic. However the firm has continued to execute on its strategic priorities, together with by launching its Eversafe 360° program to raise an infection management and wellness; selling Chris Hen to COO; hiring Welltower (NYSE: WELL) veteran Joe Weisenburger to steer enterprise growth; and making various personnel strikes inside LCS Growth.

And LCS was in a position to hold developments shifting forward regardless of the challenges of the pandemic, Government Vice President and Managing Director Chuck Murphy stated on the latest Senior Housing Information BUILD occasion in Chicago. In a single instance of this progress, LCS lately opened Clarendale at Clayton, a luxurious group developed with Ryan Cos., situated within the St. Louis suburb of Clayton.

LCS’ expertise, scale and diversification create alternatives for the corporate within the midst of the present market challenges, and the recap will allow the group to grab on these, Nelson stated.

It’s the “proper time to proceed to develop,” and the recap “provides us follow-on capital as we stay up for the following 50 years,” he stated.



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