The Dealmakers Forum E-Newsletter, May 28, 2014 - MidCap Financial Closes on $14.45 Million Financing, Aging 2.0 Founders, and more...

 

Bringing You Senior Care M&A Deals and News
 

May 28, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Hostile Takeovers In Vogue. Two hostile takeover attempts in deals worth more than $1 billion, but only one has a chance to close............ Read More   

 

Recent Senior Care M&A Deals
Long-Term Care
   
Acquirer
Target
Price
Springhill Assisted Living Facility
N/A
$19.9 million
$2.4 million
Private Owner/operator
$17 million
Red Rock Group
Twin Oaks
$3.3 million
Seven retirement communities
$160 million
$17.9 million

 

Deal of the Week

Another county-owned skilled nursing facility has gone private, in a deal that closed last week in Pennsylvania. The 220-bed facility, which was originally built in 1963 with an addition in 1982, received a $7 million physical plant upgrade in 2009, which we are sure helped the price. And while this facility in Butler County was losing money, it was a small loss and not the multi-million dollar losses we have seen with other county-owned SNF sales. Occupancy was a strong 96%, of which 75% was Medicaid. The total price, which included some accounts receivable, was $20.5 million, putting it close to $90,000 per bed. With a private owner, revenues and EBITDA are expected to be about $18.75 million and $2.225 million, respectively, compared with $18.1 million and a small loss under county ownership. Bidding was strong with several buyers at similar prices, but a regional partnership won out after county officials toured their facilities. Joshua Jandris and Mark Myers of Marcus & Millichap represented the seller, and Oxford Finance placed the mortgage debt............ 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 just closed on a $14.45 million financing for an 87-unit independent and assisted living community in Klamath Falls, Oregon, that was purchased at the end of 2011 for $11.35 million. Of the total units, 20 are in independent living cottages and the remaining 67 in a three-story building. The new loan proceeds will be used to pay off the existing debt and to build a new memory care facility with 36 units adjacent to the existing building. Since there are 16 acres, there is plenty of room. Adding memory care units is a smart decision by Living Care Lifestyles, and they have probably been following another Klamath Falls property that has 64 assisted living and 48 memory care units with 95% plus occupancy that sold last year for $187,000 per unit. The new debt will only be $117,000 per unit, and we assume the future value will be well over $160,000 per unit. Stuart Oswald of Nothmarq Capital arranged the financing with MidCap................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

Even though 40-year old skilled nursing facilities can receive a facelift to enhance value, as the one in Butler County, Pennsylvania featured above did, most very old nursing facilities sell at a significant discount. In 2013, those nursing facilities that were more than 40 years old sold for an average price of $36,800 per bed. But when the age decreases to between 20 and 40 years old, the average price jumped to $72,300 per bed, which was just below that national average for all skilled nursing facilities in 2013. In the skilled nursing sector, anything built in the past 20 years is considered to be somewhat “new,” and last year these properties sold for $110,700 per bed, and about 50% of these were actually built in the past 10 years, which is considered to be state-of-the-art. The newer facilities are more apt to have a higher subacute patient census, which drives cash flow and value..............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 Katy Fike and Stephen Johnston 

In this "Expert Opinion" interview, Katy Fike and Stephen Johnston, Co-Founders, Aging2.0, discuss technology, aging in place, the future of senior care, forming Aging2.0, and more...............Watch the video

 

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Healthcare & Real Estate 2014: June 5
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