LCS completes planned recapitalization with Redwood, McCarthy, LCS employee shareholders

Life Care Services, the nation’s second-largest senior living operator, according to Argentum and the American Seniors Housing Association, has completed a long-anticipated recapitalization that includes Redwood Capital Investments, McCarthy Capital and LCS employee shareholders. 

The LCS board of managers had been discussing its long-term strategy since the last recapitalization in 2010, LCS President Joel Nelson told the McKnight’s Business Daily. Financial terms of the transaction are not being disclosed, but Nelson said that some of the funds will be used to increase training, development and recruitment efforts. 

Additionally, he said, the company already put some capital to work last month to recapitalize a new continuing care retirement community partner and is under contract for another large CCRC acquisition that is expected to close during this quarter. 

“LCS was fortunate to onboard 15 new relationships in 2021. Today, LCS has ownership interest in more than 50 communities,” Nelson said, adding that Life Care Services plans to increase the size of its portfolio.

“We think there is a lot of opportunity to grow our partnerships with not-for-profits for third-party development services through renovation, repositioning or new community development. LCS Development will provide these services to clients who already have a strong operations team in place,” he added.

Redwood Capital is a good fit for LCS because of the company’s understanding of the senior living business and alignment with long-term shareholders, McCarthy Capital and LCS employee shareholders, Nelson said.

Redwood first entered the senior living industry with the purchase of Erickson Senior Living more than a decade ago. LCS and Erickson will continue to operate independent of one another and maintain their distinct and separate brands, he said.