July 5, 2017
A JV led by hedge fund BlueMountain Capital Management has inked a deal to acquire Kindred Healthcare’s skilled nursing business. The acquisition, valued at $910 million, includes 89 nursing centers and seven assisted living facilities totaling roughly 11,680 licensed beds in 18 states.
Louisville, Ky.-based Kindred currently leases 36 of these skilled nursing facilities from Ventas Inc. Under the agreement with the Chicago-based REIT, Kindred has the option to acquire the real estate and transfer it to a new owner. Kindred will pay Ventas $700 million for the real estate.
“Exiting the skilled nursing facility business, in its entirety, has been a long-stated goal of our enterprise,” said Kindred’s President & CEO Benjamin A. Breier in a statement. “After more than two decades of nursing center operations, this announcement clears the way to closing that chapter of Kindred’s story, and turning the page to the future of integrated post-acute care.”
Exiting the skilled nursing sector will increase Kindred’s annual cash flow by approximately $20 million to $30 million, including the reduction of its annual rent obligations by roughly $88 million and $70 million to $80 million in overhead savings, according to the company’s CFO Stephen D. Farber. The savings is part of Kindred’s enterprise-wide effort to save $70 million to $100 million through restructuring.
The BlueMountain transaction, which is subject to regulatory approval, is expected to close during 3Q17.
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