Exclusive: CareOne explores $2 billion real estate asset sale - sources

NEW YORK Mon Jun 30, 2014 6:21pm EDT

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NEW YORK (Reuters) - Privately held senior care center operator CareOne LLC said on Monday it was working with an investment bank to explore a sale of its real estate assets in an auction that people familiar with the matter said could fetch as much as $2 billion.

The Fort Lee, New Jersey-based company's asset sale, run by Jefferies Group LLC, is expected to attract interest from real estate investment trusts (REITs) as well as private equity firms, four people said on Monday.

"We can confirm that CareOne engaged Jefferies to explore the possibility of selling its real estate holdings. However, should the sale of the real estate holdings be consummated, it will have no impact on CareOne's continued operations of the business," a CareOne spokeswoman said when contacted by Reuters, declining to comment further.

The sources were not authorized to speak publicly about the sale process. A Jefferies spokesman declined to comment.

A deal for CareOne's properties would be the second major deal for its founder and Chief Executive Officer Daniel Straus, who in 1997 sold another senior care company he co-founded, Multicare Companies, to Genesis Health Ventures Inc and private equity firms Cypress Group LLC and TPG Capital LP for $1.4 billion.

A former Paul, Weiss, Rifkind, Wharton & Garrison LLP lawyer, Straus founded CareOne in 1999. The company now has more than 68 care centers in nine U.S. states, 29 of which are in New Jersey.

Recent deals in the senior living sector include Brookdale Senior Living Inc's (BKD.N) acquisition of Emeritus Corp ESC.N for $1.4 billion in February.

Healthcare REITs that would be interested in CareOne's assets typically do not operate senior care centers themselves but lease out the properties to operators once they have acquired them.

(Additional reporting by Soyoung Kim in New York; Editing by Lisa Shumaker)

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