The Dealmakers Forum E-Newsletter, February 19, 2014 - American Realty Capital Healthcare Trust Purchased Four Assisted Living Communities in Central Illinois, MidCap Financial, LLC Provided $30 Million in Financing to Continuing Healthcare Solutions, Inc

 

Bringing You Senior Care M&A Deals and News
 

February 19, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Records Set in Seniors Housing and Care M&A Market. At least three records were set in 2013 in the acquisition market for skilled nursing facilities and seniors housing..... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

Global Healthcare REIT

Southern Hills Retirement Center

$2 million

Global Healthcare REIT

Scottsburg Healthcare Center

$3.415 million

Major Hospital

Munster Med-Inn

N/A

 

Deal of the Week

With weeks to go before its IPO pricing, American Realty Capital Healthcare Trust (ARC) has just closed on the purchase of four assisted living communities in central Illinois from the local developer that built them. The purchase price is about $135,000 per unit, and these buildings are relatively new, with a few opening in the past couple of years. Two more communities will be purchased in the next few months for a similar price per unit. ARC is hiring Meridian Senior Living, which has a strong presence in Illinois, to manage them. A nice deal to warm up the IPO.  Marcus & Millichap represented the seller...... 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

MidCap Financial, LLC provided $30 million in financing to Ohio-based Continuing Healthcare Solutions, Inc. (CHS), an owner/operator of mostly skilled nursing facilities, but also assisted living, memory care and adult group homes. The financing includes a $25 million three-year revolver for working capital as well as a $5 million three-year term loan. The company wants to acquire, and the revolver will provide management with the working capital funds to take on the operations of new facilities and not worry about the timing of reimbursement post-acquisition. CHS was founded in 2011 and already has more than a dozen properties in Ohio, 10 of which are skilled nursing and rehab facilities. Quadriga Partners, LLC, a middle market investment bank that works exclusively in health care, arranged the financing on behalf of CHS.......Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

The Ensign Group Reports

It looks as if The Ensign Group is about to join the billion-dollar club, as in $1.0 billion of revenues in 2014, if all goes according to plan. Management has been spending a lot of time on the upcoming split into an operating company (still to be called Ensign) and a REIT, to be called CareTrust. Fourth quarter earnings were a little below management’s guidance, which was partly blamed on trying to recover from the difficult second and third quarters. But one thing that that came out in the conference call discussion was that with the split into an operating company and a REIT, there will be acquisitions available to them through the REIT that they might not have been able to do on their own before the split. We assume they are talking about larger acquisitions, since most of the historical transactions have been onesie-twosie deals, with a heavy share of turnaround situations. Management has excelled at these turnarounds, and they have usually paid cash. A portfolio deal is harder to pay cash for, and turning around a group of properties is certainly not as easy as one or two at a time. So…that implies a bit of a change in acquisition strategy, which is not all bad. The second thing that came out is that the split into a REIT will not be completed until the second quarter, a few months later than originally expected. Let’s hope Greg Staply has as much fun as Rick Matros........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

People on the Move

Kindred Healthcare has been making some changes in the executive suite. Stephen Farber is joining as CFO and executive vice president, replacing Richard Lechleiter who previously announced his retirement effective January 15. Mr. Farber has 20 years of experience in health care, including a stint as CFO of hospital giant Tenet Healthcare. In addition, Scott Blanchette has been appointed chief information officer, succeeding Richard Chapman who also recently retired. Separately, Jim Pieczynski has rejoined the board of directors of LTC Properties effective March 1. Pieczynski served as LTC’s president more than 10 years ago, and is currently the CEO of CapitalSource, Inc.......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 Ken Assiran

In this "Expert Opinion" interview, Ken Assiran, Managing Principal, Capital Health Group, discusses property acquisitions, HUD, Utah, debt, and more.......Watch the video

 

NEW - The Senior Care Acquisition Report, 19th Edition - Preorder Today and Get Last Year's FREE ($595 Value)!
Deals have been made. The 2014 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make into financial press. Take advantage of our limited 2-for-1 offer - Preorder The 2014 Senior Care Acquisition Report by February 28th and receive The 2013 Senior Care Acquisition Report FREE ($595 value)! Now that’s a deal! Go to http://www.levinassociates.com/landing/scar19order or call 800-248-1668 to preorder today.

 

Upcoming Interactive Webcast:
Senior Care M&A Market Review and 2014 Outlook

Sponsored by Lancaster Pollard
Thursday, February 27, 2014, 1:00 pm ET

Our panel of industry experts will analyze 2013 M&A statistics for this sector and provide their outlook for 2014. Will capital remain relatively cheap? Are SNF acquisitions still too risky? How much consolidation should we expect in the CCRC world? Who’s buying—and who’s selling—what? And how is RIDEA changing the game? Go to http://www.levinassociates.com/conferences/1402b-online-conference or call 800-248-1668 to register.

 

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