The Dealmakers Forum E-Newsletter, May 29, 2013 - New Kindred-Ventas Legal Problems, Stabilized Cash Flow, Large Skilled Nursing Chains

 

Bringing You Senior Care M&A Deals and News
 

May 29, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
New Kindred-Ventas Legal Problems. Ventas has accused Kindred Healthcare of defaulting on four leases, of which most of the properties had already been transitioned to new operators, and is seeking a $10.56 million payment to "cure" the default... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

 Chartwell Retirement Residences

 2 Senior Residences

 $19 million

 AVIV REIT, Inc.

 1 SNF in OH

 $14.4 million

Greenfield Senior Living, Inc.

Assisted Living Memory Care Community

N/A

 

Stock of the Week

A lot can happen in just three short weeks. In early May we were admiring that Kindred Healthcare had finally topped $12 per share again after jumping by 14% in two days. Now, it has topped $14 per share, and in the past week or so the shares have increased by 13%. So far in May, they are up 36%, helped a bit by one analyst’s upgrade on the stock. Management held a major investor meeting and the message they gave seemed to spur this recent buying activity. The other skilled nursing stocks have not performed this well. And the little nuisance lawsuit brought by its landlord (see this week’s 60 Seconds video) has caused no damage......... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Merger of the Week

Have the interests of the large skilled nursing chains changed recently from those of the smaller companies and mom and pops? That may be the conclusion drawn as a result of the just announced “merger” of the American Health Care Association (AHCA) and The Alliance for Quality Nursing Home Care. They are calling it the “re-absorption” of The Alliance back into AHCA, which it left a little over seven years ago when several of the large skilled nursing chains, believing their interests did not coincide with those of the mom and pops, decided to formally break off from AHCA. There may be several reasons for the re-alignment, which could include a higher opinion of the job Mark Parkinson is doing running AHCA compared with some of his predecessors, and the fact that lobbying is not cheap, so why have two lobbying groups. The reality is that with so many reimbursement pressures, the skilled nursing industry really needs a unified voice. Since some congressman still don’t know the difference between Medicaid and Medicare (sad, but true), why confuse them further with different voices with perhaps different messages? Apparently, this will no longer be the case......Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Stat of the Week

So, what is stabilized cash flow really worth? Over the last three years, assisted living communities that were stabilized (occupancy greater than 85%) were sold at approximately double the price per unit that non-stabilized communities sold for. The highest level was in 2012, when the average price for a stabilized community was $183,600 per unit, compared with just $86,000 per unit for non-stabilized properties. Before the market had fully recovered, the average in 2010 was $126,400 per unit for stabilized and $69,200 per unit for non-stabilized. Consequently, the movement in stabilized pricing has far exceeded that of non-stabilized communities. Sellers take note..... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Financing of the Week

Ziegler Financing Corporation closed on $37.65 million in HUD loans to refinance six skilled nursing facilities owned and operated by Extendicare Health Services in Michigan, Minnesota and Wisconsin. Including the current transaction, Ziegler has now placed more than $174 million of HUD debt on behalf of Extendicare from 2010 to today. Our guess is there may be more to come....... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Upcoming Interactive M&A Webcast:
Boost Your Bottom Line: Go Green!
Thursday, June 6, 2013, 1:00 pm ET            
Going green can improve your bottom line. Consumers in all age groups increasingly recognize the value in recycling waste and reducing energy use whether in their own personal lives or on a broader—even global—basis. Retrofitting existing communities and facilities has become financially sensible, as the cost of green alternatives has gone down—as has the time it takes to achieve a return on the investment. Find out more from our expert panel: Marcus Sheffer (Moderator), LEED Fellow, Energy Opportunities, Inc.; Steven Leone, Principal, Spiezle Architectural Group, Inc.; Jeffrey Perlman, President & Founder, Bright Power, Inc; Clark Reed, National Program Manager, ENERGY STAR Commercial Buildings U.S. E.P.A.; and Robert Traer, Chair, Environmental Concerns Committee, Pilgrim Place.
Go to http://www.levinassociates.com/conferences/1306-online-conference or call 800-248-1668 to register.

 

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Webcast Calendar... Click here to see more