The Dealmakers Forum E-Newsletter, April 24, 2013 - Plan Ahead For CPR, Assisted Living Concepts in Trouble…Again

 

Bringing You Senior Care M&A Deals and News
 

April 24, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Plan Ahead For CPR. CPR doesn't save as many lives as most people think, especially with the elderly..... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

Four Seasons Health Care

Optimum Care

N/A

 

Stock of the Week: The Ensign Group

It is never good when a company has to reserve $15 million against a Department of Justice investigation that began in 2006, which The Ensign Group did late last year. But this week the company announced a settlement with the Feds, and will increase its reserve by an additional $33 million to a total of $48 million. That comes to more than $2.00 per share, and when they put a new “corporate integrity” agreement in place, the annual cost of that plus interest expense on the planned payment will be $2.5 million. We suppose it is good news that the company settled, but at what cost? The good news for shareholders, however, is that after a small 1.6% dip in value on the news, the share price is back where it was and is still within $1.00 of its 52-week high. That shows some resiliency....... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Deal of the Week

Although not by any means a “done deal,” Chris Brogdon, the Vice Chairman and until recently the chief acquisitions officer of AdCare Health Systems, has announced his intention to commence a tender offer to buy more than 43% of AdCare’s shares outstanding, but less than 62%, for $8.00 per share. He and his wife already control about 12% of the company’s shares outstanding, so this tender offer would result in stock ownership of between 55% and 75%, if successful. The shares soared by 45% in value to $6.26 per share after the announcement, before slipping back down below $6.00. There was no discussion as to how Mr. Brogdon would finance the purchase (although we are not too worried about that), and the board stated it will review the unsolicited offer “if and when commenced.” The deal would represent a minimum $50 million investment by Brogdon, and he has yet to state why and what he would do with the company if he gains control. But we have a few ideas…stay tuned...Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Assisted Living Concepts in Trouble…Again?

We are not sure if TPG, the large private equity firm that was the successful bidder for Assisted Living Concepts earlier this year, really knows what it is getting itself into. It is just not a plain real estate investment that can be bought and sold based on per-unit values that may or may not be a bargain. It’s an operating business with regulations and the frail elderly as your customer, and they will learn that very quickly. ALC recently had the license of one of its facilities in Washington revoked as a result of several alleged instances of substandard care. While the 39-bed facility will remain open during the company’s appeal, it will not be able to accept new residents. Management disagrees with the revocation, but oversight appeared to be less than what would be deemed appropriate. Our guess is that the B shareholders can’t wait for the sale to be completed. .... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Expert Opinion: A Conversation with Cary Tremper

In this "Expert Opinion" interview, Cary Tremper, Senior Vice President/Managing Director, Key Bank Real Estate Capital, discusses Key's history, loan-to-value, seniors housing, construction financing, and more.... Watch Now

 

TOMORROW: Interactive M&A Webcast:
Hospitals: Buying, Selling and Valuing
Thursday, April 25, 2013, 1:00 pm ET            
The dramatic increase in Hospital M&A activity from 2010 through 2012 accounts for a 25% increase in the number of deals made compared to the prior three-year period. That steep incline in hospital mergers and acquisitions is expected to continue in the coming years. Find out more from our expert panel: David Ertel (Moderator), Chief Financial Officer, Einstein Healthcare Network; Arnie Kimmel, Senior Vice President for Development, Prime Healthcare Services; Monte Dube, Partner, Proskauer Rose; Stephen Gelineau, Senior Vice President, The Camden Group; and Jim Moloney, Managing Director / Co-Head of Tax-Exempt M&A, Cain Brothers.
Go to http://www.levinassociates.com/conferences/1304b-online-conference or call 800-248-1668 to register.

 

 

JUST PUBLISHED - The Senior Care Acquisition Report, 18th Edition - Save $50 Instantly
Deals have been made. The 2013 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make it into the financial press. Take advantage of our limited $50 savings offer - order The 2013 Senior Care Acquisition Report by May 31st and save $50 instantly! Now that’s a recession resistant deal. Go to http://www.levinassociates.com/landing/scar18order or call 800-248-1668 to order today!

 

Webcast Calendar... Click here to see more