Seniors Housing Weekly Update: Plum Healthcare Sold to Private Equity Firm

December 11, 2012


 

December 11, 2012. 60 Seconds with Steve Monroe. With 50 SNFs and a growing home health and hospice business, there was significant buying interest from the private equity community.

Plum Healthcare Sold to Private Equity Firm

With all the recent negative publicity about Medicare payments to skilled nursing providers, one would think the sky was falling on this sector.  Not so, as evidenced by the recent purchase of Plum Healthcare by Bay Bridge Capital Partners.  Two years ago, Plum more than doubled its size to 50 SNFs by purchasing Horizon West Healthcare, which operated 27 facilities at the time.  Plum was owned by private equity firm GI Partners, which hired Jon Santemma and Jefferies & Company to sell Plum, which owns almost 30% of its facilities and leases the rest.  Plum has grown EBITDA significantly over the past five years, and the sale of the company generated a return of approximately three times invested capital for the limited partners.  Plum management has a reputation for being able to turn around underperforming skilled nursing facilities, and according to Santemma, there was significant private equity interest in the deal, as they want to invest in higher quality subacute players with a solid track record who will be part of the health care solution.

 

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