Mainstreet Health Investments Inc., a company founded by Carmel-based Mainstreet Property Group, has reached a deal to acquire Care Investment Trust LLC for $425 million from New York City-based Tiptree Inc., the companies announced Friday.
The deal will make Tiptree, a financial services holding company, the largest shareholder in Mainstreet Health Investments, with 34 percent ownership. It will also result in a name change for Mainstreet, which will become known as Invesque Inc.
Care Investment Trust LLC, known as CareIT, owns a portfolio of 42 senior housing and care properties with 3,718 beds in markets across the United States. Thirty-five of the properties are independent living, assisted living or memory care facilities. The other seven are skilled nursing centers.
Mainstreet Health Investments was created through a $302 million reverse takeover of Kingsway Arms Retirement Residences Inc., which owned 10 senior housing and care properties around Chicago. The reverse takeover was announced two years ago and completed in April 2016.
For a time, the deal put Mainstreet CEO Zeke Turner and his management team in charge of Kingsway and gave Mainstreet a publicly traded investment firm to help finance its development projects. Mainstreet will own only about 5 percent of Invesque shares after the new deal closes.
Mainstreet Health shares trade on the Toronto Stock Exchange. Shares rose 12.6 percent Friday, to $9.03 each.
“Mainstreet Health Investments (now Invesque) is a company that Mainstreet founded and launched last year and was set up to run independently,” Mainstreet said in a written statement.“Mainstreet is a large shareholder, and as an investor, we support the growth of that company.”
Invesque will control 80 properties with 8,536 beds across the United States and Canada after the acquisition closes, raising its asset value to about $1.2 billion.
"We are excited to announce the acquisition of CareIT and deliver on our strategic plan to grow our platform, diversify our portfolio and provide significant value for our shareholders,” Mainstreet Health CEO Scott White said in written remarks. “We believe this transaction and the addition of Tiptree as another cornerstone investor will bolster our position in the market and position Mainstreet for the next phase of its growth.”
Tiptree will receive about 16.8 million Mainstreet Health common shares worth $163.8 million at issuance and assume about $261.2 million in mortgage financing.
The deal, which still needs regulatory approval, is expected to close in the first quarter of 2018.
Earlier this week, Mainstreet Property Group said it eliminated 12 employees, or 4 percent of its workforce, in a reorganization.