UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 30, 1997
KARRINGTON HEALTH, INC.
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(Exact name of registrant as specified in its charter)
Ohio 0-28656 31-1461482
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
919 Old Henderson Road, Columbus, Ohio 43220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 451-5151
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
On April 30, 1997, Karrington Health, Inc. (the "Company") completed its
acquisition of Kensington Management Group, Inc. (Kensington), an unrelated
third party which consisted of eight affiliated entities. The Company purchased
the assets of six of these entities and purchased the stock of the remaining two
entities. Kensington operates innovative Alzheimer's care communities which
provide Alzheimer's care programs using medical doctors with geriatric and
dementia specialties. The Company will continue to operate the acquired
residences under the Kensington name. The following table sets forth certain
information regarding Kensington residences as of April 30, 1997:
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Commenced Licensed
Open Residences Location Operations Units Beds
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Kensington Buffalo Buffalo, MN January 1981 72 77
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Kensington Bismarck Bismarck, ND May 1984 72 90
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Buffalo Cottages I Buffalo, MN November 1993 12 20
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Buffalo Cottages II Buffalo, MN October 1994 12 20
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Bismarck Cottages Bismarck, ND November 1993 12 24
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Waterloo Cottages Waterloo, IA October 1994 12 24
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Mankato Cottages Mankato, MN September 1995 12 23
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Rochester Cottages I Rochester, MN March 1995 12 22
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Rochester Cottages II Rochester, MN April 1996 12 22
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Rochester Cottages III Rochester, MN January 1997 16 28
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Total 244 350
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Residences Planned Licensed
Under Construction Location Opening Date Units Beds
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Rochester Cottages IV Rochester, MN July 1997 16 28
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Rochester Cottages V Rochester, MN November 1997 16 28
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Total 32 56
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The 10 open residences had an average occupancy of 95% as of May 1, 1997.
The aggregate purchase price for the ten open residences, the two
residences under construction and a management company approximated $28 million
and was determined through negotiations. The total consideration paid consisted
of $21.7 million of new bank debt, $1.7 million of assumed bank debt, $1.5
million of the Company's common stock (137,363 shares) and approximately $3.1
million in cash.
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Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
The financial statements required by Item 7(a) are presently being
prepared and have not been included in this Form 8K. The required financial
statements will be filed by an amendment as soon as practical and, in any event,
within 60 days from the date of this report.
(b) Proforma financial information
The proforma financial information required by Item 7(b) is presently
being prepared and has not been included in this Form 8K. The required proforma
information will be filed by an amendment as soon as practical and, in any
event, within 60 days from the date of this report.
(c) Exhibits
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Exhibit No. Exhibit Name
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2.1 Stock Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Kensington Cottages Corporation of Minnesota
and the individual shareholders of Kensington Cottages
Corporation of Minnesota.
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2.2 Agreement and Plan of Merger dated April 24, 1997 by and
among Karrington Health, Inc., Kensington Mergeco, Inc.,
Kensington Management Group, Inc. and Jon D. Rappaport.
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2.3 Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Buffalo Hills Residence and Jon D. Rappaport.
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2.4 Asset Purchase Agreement dated April 24, 1997 by and
among Kensington Cottages Corporation of America,
Karrington Health, Inc., Centex-Kensington (Mankato I)
Partnership, Centex Senior Services Corporation, Centex
Life Solutions, Inc., Kensington Cottages Corporation of
Mankato and Jon D.
Rappaport.
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2.5 Asset Purchase Agreement dated April 24, 1997 by and
among Kensington Cottages Corporation of America,
Karrington Health, Inc., Kensington Cottages Corporation
of North Dakota and the individual shareholders of
Kensington Cottages Corporation of North Dakota.
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2.6 Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Kensington Cottages Corporation of Rochester
and Jon D. Rappaport.
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2.7 Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Kensington Cottages Corporation of Iowa and
the individual shareholders of Kensington Cottages
Corporation of Iowa.
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Exhibit No. Exhibit Name
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2.8 Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Bismarck Investors, Kensington Living
Centers, Inc. and Jon D. Rappaport.
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The above exhibits will be filed by amendment to this Form 8K. Attachments
to the above exhibits will be omitted as they do not contain information which
is considered material to an investment decision or such information is
otherwise disclosed in the agreement. Omitted attachments primarily represent
legal opinions, closing certificates and various schedules which will be
furnished supplementally upon request by the Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KARRINGTON HEALTH, INC.
Date: May 15, 1997 By: /s/Mark N. Mace
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Mark N. Mace
Senior Vice President, Finance
and Treasurer
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INDEX TO EXHIBITS
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Exhibit Number Description
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2.1 * Stock Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington Health,
Inc., Kensington Cottages Corporation of Minnesota and the
individual shareholders of Kensington Cottages Corporation of
Minnesota.
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2.2 * Agreement and Plan of Merger dated April 24, 1997 by and
among Karrington Health, Inc., Kensington Mergeco, Inc.,
Kensington Management Group, Inc. and Jon D. Rappaport.
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2.3 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Buffalo Hills Residence and Jon D. Rappaport.
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2.4 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington Health,
Inc., Centex-Kensington (Mankato I) Partnership, Centex Senior
Services Corporation, Centex Life Solutions, Inc., Kensington
Cottages Corporation of Mankato and Jon D. Rappaport.
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2.5 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington Health,
Inc., Kensington Cottages Corporation of North Dakota and the
individual shareholders of Kensington Cottages Corporation of
North Dakota.
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2.6 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Kensington Cottages Corporation of Rochester
and Jon D. Rappaport.
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2.7 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington Health,
Inc., Kensington Cottages Corporation of Iowa and the
individual shareholders of Kensington Cottages Corporation of
Iowa.
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2.8 * Asset Purchase Agreement dated April 24, 1997 by and among
Kensington Cottages Corporation of America, Karrington
Health, Inc., Bismarck Investors, Kensington Living Centers,
Inc. and Jon D. Rappaport.
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* To be filed by amendment.
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