Leisureworld Announces Significant Portfolio Acquisition of Ontario Long-Term Care and Retirement Residences, $108.5 Million Public Offering and Appointment of Chief Executive Officer

MARKHAM, ONTARIO--(Marketwired - April 4, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Leisureworld Senior Care Corporation ("Leisureworld" or the "Company") (TSX:LW) today entered into acquisition agreements to acquire from Specialty Care Inc., Specialty Care Investments Inc. (collectively "Specialty Care") and certain other parties, a portfolio of 10 properties in Ontario consisting of 6 long-term care ("LTC") homes, 2 retirement residences and 2 properties containing both LTC and retirement residences components (the "Acquisition"). The Acquisition comprises in total 1,235 LTC beds and 326 retirement suites (the "Properties"), as well as the third party seniors living management business operated by Specialty Care Inc. ("Management Business"). The aggregate gross purchase price is approximately $254 million, which does not reflect a mark-to-market adjustment on assumed debt as of the closing, currently estimated at $10 million. In conjunction with this transaction, the Company also announced an agreement to sell, on a bought deal basis, $68.5 million of subscription receipts (the "Subscription Receipts") and $40.0 million of aggregate principal amount of extendible convertible unsecured subordinated debentures (the "Debentures").

"We are focused on continuing to grow Leisureworld as a leading provider of LTC homes and retirement residences. Specialty Care is a high-quality acquisition with a brand that is well recognized and respected in the industry," said Dino Chiesa, Chair of the Board. "The Acquisition is expected to be immediately accretive to our AFFO per common share on a debt-neutral basis, while complementing Leisureworld's current portfolio and platform."

Leisureworld believes the transaction will bring a number of benefits to its shareholders, including:

• Strategic Acquisition: Specialty Care represents an attractive opportunity to acquire a significant LTC portfolio and solidify Leisureworld's position as a leading LTC provider in Ontario. The Acquisition increases Leisureworld's LTC beds by 28% and retirement suites by 44% and aligns with Leisureworld's strategic goal to provide a continuum of care. The Properties are located exclusively in southern Ontario, in many of the same markets as Leisureworld's homes, which provides opportunities to achieve synergies from combined operations.
   
• High Quality Portfolio: 85% of the LTC portfolio consists of New or Class A beds, improving Leisureworld's mix of LTC beds post transaction. These beds are entitled to receive per diem construction funding from the Ontario Ministry of Health and Long-Term Care ("MOHLTC"). The average age of the Properties is 12 years and 63% of the Properties(1) opened in the last 10 years. The residences are well maintained and have an excellent reputation. The portfolio's weighted average occupancy was 96.4% as at March 31, 2013.
   
• Immediate Accretion: The Acquisition is immediately accretive and within the first full year of operations is estimated to be approximately 14% accretive to Leisureworld's Adjusted Funds From Operations ("AFFO") per common share.
   
• Well Respected Management Platform: Specialty Care has owned and managed LTC and retirement communities since 1976 and has a track record of strong performance. Specialty Care has an excellent industry reputation for its service delivery expertise, organizational culture, knowledge of the market and regulatory processes. Importantly, the acquisition of Specialty Care brings with it management expertise in retirement home development, lease-up and operations which will align with Leisureworld's experienced management team to further Leisureworld's growth in the senior housing sector.
   
• Potential Growth Opportunities: The senior management team of Specialty Care brings a wealth of sector contacts and relationships which could lead to additional acquisition opportunities. The Acquisition also provides enhanced growth opportunities in complementary businesses such as external management of third party owned homes, provision of professional services, such as nursing and program support, home care and provision of consulting services. In addition, five of the Properties have adjacent excess lands which present significant development opportunities.
   

(1) Based on numbers of beds for LTC and number of suites for Retirement Homes.

The Properties and the Management Business are an excellent strategic fit within Leisureworld's current business. The Acquisition underscores the Company's focus on its core market and growth of its primary business. It will significantly increase the Company's position in Ontario's LTC market, where it will be among the largest operators in the province, and give the Company increased scale in Ontario's rapidly growing retirement home market.

APPOINTMENT OF NEW PRESIDENT AND CHIEF EXECUTIVE OFFICER

Leisureworld is also pleased to announce the appointment of Lois Cormack as President and Chief Executive Officer, effective April 22, 2013. Ms Cormack is President of Specialty Care Inc. and over the past 4 years, under her leadership, Specialty Care Inc. has increased beds under management by 32% and implemented a robust retirement home sales platform.

Ms Cormack is a respected leader in the Ontario retirement and LTC sector, has served on a number of provincial and national committees and has been on the Board of Directors of the Ontario Long Term Care Association for six years and is its immediate past chair.

Ms Cormack holds a Masters of Health Administration from the University of Toronto and is a graduate of the Ivey Executive Program, Richard Ivey School of Business, University of Western Ontario.

Mr. Chiesa commented on the appointment: "Last year, Leisureworld embarked on a thorough process to identify its new CEO. The Board had interviewed a number of highly qualified candidates, including Ms Cormack. We are delighted to have Ms Cormack assume the leadership of the Company. Ms Cormack brings significant experience in the senior housing sector, valuable relationships, knowledge of the regulatory environment, strong leadership skills and a passion for the business. I look forward to working with Ms Cormack on integrating Specialty Care with Leisureworld and to her leadership for long-term value creation for Leisureworld shareholders."

Mr. Chiesa added: "I would also like to welcome the approximately 1,600 current employees of Specialty Care to Leisureworld. The two organizations share common values and a dedication to the highest level of service delivery to our residents. I am confident that by leveraging the combined resources, we will continue to improve the quality of life for our residents and career satisfaction for our employees." The experienced team at each home will continue to operate the homes after the completion of the Acquisition and the existing senior corporate management team of Specialty Care in combination with the current senior management team of Leisureworld, will position the Company as a leader in senior housing management capabilities.

DESCRIPTON OF THE PROPERTIES

The following table provides a summary description of the Properties.

LTC = Long Term Care; IL = Independent Living; AL = Assisting Living

¹ Occupancy as at March 31, 2013.

Leisureworld is also acquiring Specialty Care's full-service seniors housing management platform, which includes the management of various LTC homes and retirement residences that are owned by third parties and the provision of management consulting services to other industry participants, including operators and developers of senior housing properties.

ACQUISITION FUNDING

The purchase price is comprised of approximately $218.5 million for the Properties and the Management Business (excluding a mark-to-market adjustment on assumed debt as of closing, which is currently estimated at $10 million) and approximately $35.5 million for construction funding receivable. The implied capitalization rate on stabilized NOI is approximately 8.1%, excluding the construction funding receivable, which is expected to result in approximately $3.9 million in cash receipts per year.

Leisureworld intends to finance the Acquisition as follows: (a) the assumption of approximately $140 million in existing book value debt (which does not reflect a mark-to-market adjustment currently estimated at approximately $10 million), at a weighted average face interest rate of 5.85% and a weighted average term to maturity of 4.6 years, (b) the issuance of $7,000,000 of common shares of Leisureworld to Specialty Care, at the same price as the offering price for the Subscription Receipts and (c) cash derived from a portion of the proceeds of the public offering described below. Following the closing of the Acquisition, the Company's debt to gross book value ratio is expected to be approximately 53%(2) excluding the Debentures.

² 57% including the Debentures.

ACQUISITION AGREEMENTS

Leisureworld has completed an extensive due diligence on the Acquisition, including commissioning property condition reports, environmental assessments and real property valuations.

One of the retirement residences (Cedarvale) is currently in its lease-up phase, with current occupancy of approximately 71%, and another retirement residence (Lincoln Park) has a limited number of occupied suites where residents currently pay a discounted rent. The aggregate purchase price includes separate income guarantees of $500,000 and $400,000, respectively, to be held in escrow and used by the Company to complement cash flow from these residences in accordance with the terms of the Acquisition agreements. These income guarantees are intended to increase after-tax net operating income ("NOI") to a stabilized after-tax NOI.

As of July 1, 2012, the MOHLTC increased the private and the semi-private accommodation premiums for all new residents of Class A LTC homes. The aggregate purchase price includes an income guarantee of $400,000 to be held in escrow and used by the Company to complement cash flow in accordance with the terms of the Acquisition agreement. The income guarantee is intended to increase after-tax NOI during the remaining turn-over period for the private and semi-private beds to a stabilized after-tax NOI based on the new announced premiums.

The purchase price payable for the Acquisition is subject to customary post-closing adjustments and other adjustments including a mark-to-market adjustment for assumed debt, adjustments providing for NOI stabilization as described above, and adjustments in respect of capital expenditures in relation to the Properties. The Acquisition agreements contain representations and warranties customary for transactions of this nature, certain of which are qualified as to materiality and knowledge and subject to reasonable exceptions. Subject to certain exceptions, the representations and warranties in the Acquisition agreements survive for a period of one year from completion of the Acquisition. Specialty Care has agreed to indemnify Leisureworld against any loss arising from a breach of representation, covenant, agreement or obligation given by any of the sellers under the Acquisition agreements and certain other claims.

Completion of the Acquisition is subject to customary closing conditions for transactions of this nature including the receipt of all necessary third party consents and regulatory approvals, including approval from the MOHLTC. Leisureworld expects the completion of the Acquisition to occur in the fourth quarter of 2013.

BOARD APPOINTMENT

Upon completion of the Acquisition, Paula Jourdain Coleman, Board Chair and CEO of Specialty Care, will be appointed as a Director of Leisureworld. Ms Jourdain Coleman joined Specialty Care in 1981 and has since led the transformation and growth of the company. Ms Jourdain Coleman brings extensive experience in long-term care management, facility development, government relations and financial management. Ms Jourdain Coleman commented: "I'm excited to be joining the Board of Directors of Leisureworld and working with it to leverage the combined skills of both organizations with a view to making Leisureworld a pre-eminent provider of seniors care across Canada."

DESCRIPTION OF PUBLIC OFFERING

Leisureworld has entered into an agreement with a syndicate of underwriters led by TD Securities Inc. to sell, on a bought deal basis, 5,525,000 Subscription Receipts at a price of $12.40 per Subscription Receipt for gross proceeds of $68.5 million and $40.0 million aggregate principal amount of Debentures. The underwriters will have an over-allotment option to purchase up to an additional 828,750 Subscription Receipts at the same offering price and $6.0 million additional aggregate principal amount of Debentures, exercisable, in whole or in part, no later than 30 days after the closing of the offering. The underwriters may exercise the over-allotment option for Subscription Receipts, Debentures or any combination of Subscription Receipts and Debentures. If the over-allotment option is exercised in full, the gross offering size will total $124.8 million, consisting of $78.8 million of Subscription Receipts and $46.0 million of Debentures.

Each Subscription Receipt represents the right to receive one common share of Leisureworld (each, a "Share"), at no additional consideration on the closing of the Acquisition. The proceeds from the offering of Subscription Receipts will be deposited in escrow pending the closing of the Acquisition. If the Acquisition closes on or before January 2, 2014, the escrowed proceeds from the offering of Subscription Receipts will be released to the Company and used by the Company to pay a portion of the purchase price of the Acquisition. If the Acquisition does not close by January 2, 2014, or the Acquisition is terminated at an earlier time, or Leisureworld advises the underwriters or announces to the public that it does not intend to proceed with the Acquisition, the escrowed proceeds and pro rata entitlement to interest thereon will be paid to holders of the Subscription Receipts.

The Debentures will have an initial maturity date of January 2, 2014, which will be extended to June 30, 2018 upon the closing of the Acquisition. The Debentures will have an interest rate of 4.65% per annum payable semi-annually in arrears on the last day of June and December in each year commencing December 31, 2013. Each $1,000 principal amount of Debentures is convertible at the option of the holder into approximately 59.7015 Shares (representing a conversion price of $16.75), subject to adjustment in certain circumstances, at any time prior to the close of business on the earlier of the business day immediately preceding the maturity date and the business day immediately preceding the date fixed for redemption of the Debentures.

On or before April 10, 2013, the Company will file with the securities commissions or other similar regulatory authorities in each of the provinces of Canada, a preliminary short form prospectus relating to the issuance of the Subscription Receipts and the Debentures. Closing of the offering is expected to occur on or about April 25, 2013, subject to Toronto Stock Exchange and other necessary regulatory approvals.

The securities offered pursuant to the Subscription Receipt and Debenture offering have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

ADVISORS

TD Securities is acting as financial advisors to Leisureworld in connection with the Acquisition.

ABOUT SPECIALTY CARE

Specialty Care is a private, family-owned Canadian company founded in 1976 which operates 10 retirement communities, 16 long term care homes and has a successful management consulting division. It is guided by a resident-centred philosophy that honours individual choice and provides opportunities for wellness and engagement. With over 37 years of experience providing care and services to seniors, Specialty Care's communities are recognized for their innovative programs, proven record for quality and responsiveness.

ABOUT LEISUREOWRLD SENIOR CARE CORPORATION

Leisureworld Senior Care Corporation is Canada's fifth largest operator of seniors' housing and the third largest licensed LTC provider in Ontario. Leisureworld owns and operates 27 LTC homes across Ontario with 4,474 beds. The Company also owns and operates five retirement residences and one independent living residence, representing 739 suites, in Ontario and British Columbia. Leisureworld subsidiaries include: Preferred Health Care Services, an accredited provider of professional nursing and personal support services; and Ontario Long Term Care, a provider of dietary, social work, and other regulated health professional services. For more information, please visit the Company's website at www.leisureworld.ca.

FORWARD-LOOKING STATEMENTS

Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words and include, among other things, statements related to the Company's financial results or strategic plans. Forward-looking statements include: the Company's intention to complete the offering, successful closing of the Acquisition; the expected benefits of the Acquisition to Leisureworld shareholders, including that the Acquisition is anticipated to be accretive to the Company's AFFO; the effect of the income guarantee on after-tax NOI; the financing of the Acquisition through the assumption of existing debt, the issuance of Shares and cash derived in part from a portion of the proceeds of the public offering; and the expected Debt to Gross Book Value ratio following the closing of the Acquisition. These forward-looking statements are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. These risks and factors include, but are not limited to: actual future market conditions being different than anticipated by Leisureworld's management; material changes to government and environmental regulations affecting Leisureworld's operations; material shifts in demographic trends; failure by Leisureworld to maintain good relationships with its unionized employees; and the risks described under "Risk Factors" in the short form prospectus and those risks discussed in other documents incorporated by reference therein and filed on SEDAR, accessible at www.sedar.com. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care facilities by government entities.
Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in forward-looking statements include: the views of management of Leisureworld regarding current and anticipated market conditions; expected government priorities and spending; absence of material changes to government and environmental regulations affecting Leisureworld's operations; management's views as to demographic trends; Leisureworld's ability to maintain good relationships with its unionized employees; the successful completion of the Acquisition and the financing thereof, and the financial and operating attributes of Leisureworld and the Properties and the Management Business as at the date hereof.

Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of Leisureworld as at the date of this news release and speak only as at the date of this news release. Leisureworld does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.

NON-IFRS MEASURES

Certain terms used in this news release, such as AFFO and NOI, are not measures defined under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. AFFO and NOI should not be construed as alternatives to "net income (loss)" or cash flow from operating activities determined in accordance with IFRS as indicators of the Company's performance. The Company's method of calculating AFFO and NOI may differ from other issuers' methods and accordingly, these measures may not be comparable to measures used by other issuers. The Company believes that NOI and AFFO are useful in the assessment of its operating performance and that this measure is also useful for valuation purposes and is a relevant and meaningful measure of its ability to earn and pay dividends on its common shares. Examples of reconciliations of NOI and AFFO to the most directly comparable measure calculated in accordance with IFRS are provided in the Company's MD&A for the year ended December 31, 2012.