Hello, and thank you for dialing in. I'm Kathryn Bradley, Vice President, Corporate Development at Extendicare, and I am joined by Michael Guerriere, President and CEO, and David Bacon, Executive Vice President and Chief Financial Officer. We are very pleased to have the opportunity to discuss Extendicare's acquisition of CBI Home Health, which we announced earlier today. Today's slide presentation is available on our website, but before we get started, please be reminded that today's call may include forward-looking statements and Non-GAAP and other financial measures. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. We have identified such factors, as well as details of Non-GAAP and other financial measures in our public filings with the securities regulators, and suggest that you refer to those filings. With that, I'll turn the call over to Michael.
Thank you, Kathryn. As Kathryn mentioned, today's announcement of our acquisition of CBI Home Health is a strategic opportunity that materially advances our services-oriented growth model. Turning to slide five, we are a leading Canadian provider of seniors' care and services operating across three segments: long-term care, home health care, and managed services. We're Canada's largest long-term care operator, operating a network of 99 homes. We also have a robust M&A track record, including two acquisitions that we closed this year. Closing the Gap, a leading provider of integrated home and community-based health care, which added approximately 10% to our home care volume, and nine long-term care homes that we acquired from Revera. We are pursuing growth through a capital-efficient, services-focused business model. We're focused on expanding our home health care segment organically and through acquisitions, and leveraging our joint venture with Axium to fund long-term care development and expansion.
The joint venture structure largely addresses the capital required to grow this aspect of our business. Turning to slide six, Extendicare has been publicly traded on the TSX for over 50 years. Our growth is underpinned by favorable demographics and a fragmented Canadian seniors' care market, which we will address in more detail shortly. With a strong balance sheet, low leverage, and stable revenue, over 90% of which comes from government contracts, we are well positioned to drive continued growth and shareholder value. We've invested a lot in our technology platform. It underpins our service quality and reliability, and it is a major factor in the scale economies that have been driving the margin expansion we have achieved in the last couple of years. Turning to slide seven, we've announced the acquisition of CBI Home Health, the home health care segment of CBI Health.
In 2024, CBI's more than 8,500 team members delivered over 10 million hours of service to Canadians, driving CAD 478 million in revenue and CAD 62 million in adjusted EBITDA for the 12 months ended July 31, 2025. This acquisition is very complementary to our own home care operations and will create the largest home health care platform in Canada. It takes us to new geographies and new business models and provides an opportunity to deliver significant synergies as we scale up the volumes we drive through our technology platform. It will be immediately accretive to earnings per share. We will fund the purchase with an upsizing to our existing seniors' secured credit facility, a bought deal private placement equity offering, and cash on hand. Now I'll turn it over to Kathryn to provide a brief overview of our business today.
Thank you. Turning to slide nine, as Mike noted earlier, Extendicare leverages a diversified business model to drive growth without significant capital requirements. We are focused on the delivery of publicly funded health care services through our three business segments: long-term care, which includes the 59 long-term care homes across Ontario, Alberta, and Manitoba that we fully own and operate; home health care, which operates under the ParaMed brand, including our recent acquisition of Closing the Gap. ParaMed delivers approximately 13.5 million hours of service on an annualized basis; and managed services, which is comprised of two pieces: management and consulting services, which is largely made up of management fees earned on homes we do not wholly own, including 28 homes owned by our Axium joint venture; and SGP Purchasing Partner Network, our group purchasing services that purchase on behalf of nearly 150,000 third-party and JV beds across the country.
Currently, nearly 55% of our NOI is derived from our services business segments. Turning to slide 10, we can clearly see the demographic realities that drive the demand for our services. The eldest baby boomers are about to hit 80, and the youngest are turning 60, so we are far from the crest of the wave. The number of Canadians 85 years and older will double by 2036 and triple by 2051. Extendicare services are largely focused on the 80-plus segment of the population. We are leveraging our partnership with Axium to build new long-term care homes to help meet this demand, but even with this development activity in the sector, the supply of long-term care beds will still lag demand for years to come.
As you can see on slide 11, the chart on the right shows the ratio of long-term care beds per 1,000 Ontarians over the age of 75, which peaked almost 20 years ago and has been on a steady decline ever since. Even with the development activity in the sector over the last several years, we are not keeping up. To that end, home health services have a critical role to play to help address the supply-demand imbalance and ease the pressures on the broader health system. Home care is the most cost-effective way to deliver care and supports most seniors' desire to age in their own homes for as long as possible. Given our business mix, we are well positioned to address this need, leveraging the scope and scale of our services and the strength of our balance sheet.
Turning to slide 12, we've seen the challenges experienced in other parts of the health care system, such as the pressures on the acute care hospitals and shortage of long-term care beds drive increased demand for home care services. We have made significant investments in our recruiting processes, training programs, and technology platform to help meet this demand and are proud of the results these investments have yielded, including a 33% increase in service volumes since 2022. Our acquisition of Closing the Gap, which is expected to add 1.1 million service hours and CAD 9.8 million in NOI, demonstrates our ability to leverage M&A to help augment strong organic growth. Provincial governments continue to invest in home health care services, supporting sustainable growth. Turning to slide 13, Extendicare's LTC segment is comprised of 59 wholly owned long-term care homes, which have returned to pre-pandemic occupancy and NOI levels.
Occupancy across the portfolio is above the 97% threshold required to receive full government funding. Regular government rate increases mitigate the impacts of inflation and enable stable operating margins, which result in same property NOI growing in line with inflation. Turning to slide 14, managed services is the highest margin business segment with NOI margin of between 50-55%. It is comprised of our Extendicare Assist business and SGP Purchasing Network. Today, 28 of the 40 homes we manage are for our joint venture partner Axium, which generates long-term stable management fees. As we continue to pursue redevelopment in the joint venture, this drives growth in our management fees as well as earning development fees through the course of construction. Through SGP, we offer an opportunity for smaller operators in the seniors' living sector to benefit from our scale and buying power.
SGP is truly national and operates in every province and territory with over 500 customers. Finally, turning to slide 15, we have been able to pursue development activity in a capital-efficient manner through our joint venture with Axium Infrastructure, where we own 15% of the JV and Axium owns the balance. We earn development fees through the construction of new homes in the joint venture and then management fees for operating the new homes through the life of the home, generating long-term recurring revenue in our managed services segment. Together, we have opened three new homes since March 2024, and we have six homes currently under construction. The development costs and associated financing for these projects are all held by the joint venture and off of Extendicare's balance sheet. We have another 18 projects that we are advancing through the development cycle.
We will start one more project before year-end and are targeting three more in 2026. With that, I'll turn it over to David.
Thank you, Kathyrn. On slide 16, you can see on the right-hand side the pro forma full-year impact of the Closing the Gap and long-term care transactions we closed earlier this year. As at September 30, 2025, on a pro forma trailing 12-month basis, our consolidated revenue is now CAD 1.7 billion and Adjusted EBITDA is CAD 166 million. Through the acquisitions completed to date, combined with focused operational execution and investment in our team and technology, Extendicare has delivered a 55% Adjusted EBITDA cumulative average growth rate since 2022. We continue to see M&A as an opportunity to augment our strong organic growth, particularly where there is an opportunity to diversify service mix and geography. The acquisition of CBI Home Health checks all these boxes. Turning to slide 18, CBI Home Health has operated for more than 40 years.
Its 8,500 team members operate across seven provinces and deliver a comprehensive suite of home health care services. CBI has a highly experienced management team who will add further depth to our own talented ParaMed team. Turning to slide 19, CBI's revenue is 95% derived from government contracts. The CBI Home Health team has an established track record of providing exceptional service and personal support, nursing, therapy, and specialized community services, and its operations are anchored in Ontario and Alberta. When combined with our own operations, this will create a sizable presence in Alberta, which we view as a very favorable market. Turning to slide 20, the transaction has a highly compelling financial profile. The purchase price of CAD 570 million represents approximately 9.4 times Adjusted EBITDA.
We anticipate achieving approximately CAD 7.4 million in IT and other cost synergies within the initial two years post-closing, reducing the implied multiple to 8.4 times. Longer term, we do expect to drive further efficiencies through scale and enhanced use of technology over time, but these are not reflected in the 8.4 times synergized multiple. We are comfortable with the post-closing pro forma leverage of 3.3 times pro forma total debt to Adjusted EBITDA, as the strong free cash flow profile of the business will enable near-term deleveraging post-closing. Turning to slide 21, on a pro forma basis, the transaction is immediately accretive to earnings and AFFO per share, both on a pre and post-synergy basis.
On the left side, you can see the chart I previously discussed reflecting Extendicare's current financial profile, and the chart on the right reflects the addition of CBI Home Health, resulting in combined revenue of CAD 2.2 billion and Adjusted EBITDA of approximately CAD 228 million. Now I will turn it back to Mike for his closing remarks.
Thank you, David. As outlined on slide 22, the acquisition of CBI Home Health diversifies our geographic footprint and establishes a sizable market presence in Alberta to augment ParaMed's focus in Ontario. It enhances our capabilities by adding innovative care models, working with hospitals and social service agencies to support people living independently in the community. It aligns with our services-focused strategy and positions us to capitalize on favorable industry dynamics driven by demographics and enduring supply constraints in institutional care. CBI Home Health has a compelling financial profile that is highly accretive to Extendicare's business model and leverages scale to drive industry-leading operating performance. The acquisition of CBI Home Health is a transformative step for Extendicare, creating Canada's preeminent home health care platform to complement our industry-leading long-term care platform.
It will allow us to support more Canadians to live independently at home while leveraging our technology to drive outstanding customer experience and deliver strong value for shareholders. Thank you for your interest, and if you have any questions, please do not hesitate to contact us.