The Dealmakers Forum E-Newsletter, February 4, 2015 - Ensign acquires two properties in bankruptcy sales


Bringing You Senior Care M&A Deals and News

February 4, 2015 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Kindred Completes Gentiva AcquisitionWith $7.2 billion in annual revenues, Kindred Healthcare is the largest post-acute provider in the country, but now the hard work begins................ Read More   



Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Amerita, Inc. InfusionRx N/A
Long-Term Care    
Large capital group Hidden Oaks $7.5 million
Regional Owner/Operator The Legends at Hillsboro $4.2 million
Oklahoma Operator Skilled nursing facility $1.2 million
Private REIT Loving Arms Assisted Living $14.3 million
Capital Senior Living Corp. 2 assisted living communities $32.8 million


Deal of the Week 

Adding to its fast start to 2015, The Ensign Group just announced its acquisition of two more properties, a post-acute care campus in West Texas and a Nebraska CCRC with 309 units. What’s interesting about these though is that they were both acquired in bankruptcy sales. Mesa Springs (the post-acute campus) in Abilene, Texas is comprised of a 75-unit skilled nursing component and 60 independent living homes. Its owner/operator, Sears Methodist Retirement System which has 11 facilities across Texas, filed for bankruptcy protection in June 2014, though Mesa Springs was approximately 80% occupied and was in good condition. Next, Ensign acquired a CCRC in Omaha, Nebraska from Skyline Manor, which filed for bankruptcy protection in May 2014. The CCRC featured a 100-bed skilled nursing operation and 209 units of independent and assisted living, and was only 69% occupied at acquisition. In addition to the sub-par operations, Skyline Manor apparently owed between $11 and $12 million to Oxford Finance for a loan that it took out to refinance previous debt at more favorable terms. Both acquisitions are expected to be accretive to 2015 earnings. These two deals (of seven made so far this year) bring Ensign’s portfolio to 143 facilities................................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

A not-for-profit, 805-unit CCRC in New Oxford, Pennsylvania with plans to build new cottages and expand its skilled nursing and memory care services, received a $10 million short-term, taxable line of credit from PNC Bank that was facilitated by HJ Sims. The CCRC had an existing relationship with PNC, which has letters of credits backing the CCRC’s variable rate debt. Since the projects will be phased over three years, the exact costs of the expansion project will not be known for 12-18 months and a more flexible financing strategy was needed, and the taxable option allowed the not-for-profit to borrow at a very low cost of financing (approximately 1.25% floating rate). The proceeds will fund the initial phase cottages (19 units) along with the initial costs of the memory care project and additions to certain common areas. The CCRC will draw from the funds at a variable rate tied to 30 day LIBOR plus a credit spread. During the term, the CCRC can repay the line at par or redraw it................................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

The health care REITs had a good January, reporting gains in their stock prices across the board. Aviv REIT (NYSE: AVIV) was the big winner, with a 14% gain in the month of January, with both Omega Healthcare Investors (NYSE: OHI) and Universal Health Realty Trust (NYSE: UHT) reporting 12% increases. Meanwhile the senior care provider stocks largely fell this month, with the exception of Kindred Healthcare (NYSE: KND) and National Healthcare (NYSE: NHC). Five Star Quality Care (NYSE: FVE) lost 16% of its value in January, settling at $3.48 per share. Brookdale Senior Living (NYSE: BKD), on the heels of their fourth quarter results falling short of expectations, dropped 8%, and Ensign Group (NYSE: ENSG) fell by 6%. Why did these two groups see such different results? The Brookdale announcement probably did none of the providers any favors. But on the REIT side, since interest rates are so low and dividends keep rising, people are still investing to take advantage of the REITs’ attractive yields.............................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 Laca Wong-Hammond

In this Expert Opinion, Laca Wong-Hammond, Managing Director, Duff & Phelps, discusses predictions for 2015, long-term care, and foreign investment in U.S. health care assets........Watch the video


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