Following the recent news that Milwaukee-based Extendicare Health Services will close on April 30, Extendicare’s president and chief executive officer said local offers of employment have been extended to approximately 190 of the 287 affected employees.
“We have made every effort to work with the various management companies involved in this transaction,” said Tim Lukenda, president and CEO. “Extendicare will work closely with the Department of Workforce Development in providing resources to any remaining employees impacted by this transaction.”
Markham, Ontario-based Extendicare Inc. notified state officials in February of its intent to close the headquarters of its Milwaukee-based Extendicare Health Services subsidiary. The closure is a result of Extendicare’s board of directors’ decision to sell substantially all of the company’s U.S. business to a group of investors led by Formation Capital LLC, a Georgia-based, healthcare-focused private investment firm, for $870 million.
That decision was announced in November 2014 at which time Lukenda said, “This transaction realizes our stated objective of separating our U.S. and Canadian businesses. Importantly, this transaction generates substantial cash proceeds that accelerate our vision to further grow our Canadian business and expand our service offering.”
Extendicare has already begun that process as it announced in January 2015 its intent to expand its Canadian home health care business by acquiring the Revera Home Health Business from Mississauga, Ontario-based Revera Inc. for $83 million.
Extendicare first announced its plan to separate its U.S. and Canadian businesses in May 2013. The company cited long-standing challenges due to the complexities associated with the company’s cross-border business mix and operations as well as the contrasting U.S. and Canadian senior care operating and regulatory environments.
Extendicare Health Services Inc. operates 156 senior care facilities in the United States with approximately 15,000 beds. It offers a continuum of health care services, including nursing care, assisted living and related medical specialty services, such as sub-acute care and rehabilitative therapy on an inpatient and outpatient basis.
Milwaukee real estate developer Joseph Zilber, the founder of Zilber Ltd., sold the nursing home division of his business to Extendicare Inc. As part of the deal, Zilber insisted the company move its headquarters from Toronto to Milwaukee. The firm’s Extendicare Health Services Inc. remained based in downtown Milwaukee.
Zilber Ltd. still owns the downtown Milwaukee office building at 111 W. Michigan St. where Extendicare Health Services’ headquarters is located.
Last year Extendicare Health Services Inc. agreed to pay out $10 million in a settlement to resolve allegations that it provided unnecessary services to drive up Medicare billings.