Kindred Healthcare Announces $218 Million Acquisition

August 24, 2010

August 24, 2010
Early today Kindred Healthcare announced the acquisition of five long-term acute care (LTAC) hospitals in southern California from Vista Healthcare, LLC

for $180 million in cash, or $720,000 per bed.  These hospitals generate $150 million in annual revenue and $27 million in EBITDA, for a 15% cap rate before transition and closing costs.  Kindred also signed an agreement to purchase, from a different seller, three recently-constructed skilled nursing and rehab facilities in the Dallas-Fort Worth market for $38 million in cash, or $93,800 per bed.  These generate revenues and EBITDA of $24 million and $3 million, respectively, representing a cap rate of 7.9%.  Kindred plans on developing two of these facilities into transitional care centers focused on short-term rehab and medically complex patients.

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Kindred LTACH Comps

Here is an example of a high per bed trade $720k/bed, but also a very high cap rate at 15%. Maybe this is due to the time of purchase August 2010, or maybe its because the existing lease payments were at risk or had bad coverage. Kindred was the buyer.

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