Bringing You Senior Care M&A Deals and News
November 20, 2013 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Some County-Owned SNFs Just Need To Be Sold. When they lose a million dollars or more a year, even unions don’t have a good excuse to keep them in government-owned hands. Read More
Recent Senior Care M&A Deals
Home Health Care
Acquirer
Target
Price
Addus HomeCare Corporation
Medi Home Private Care division
N/A
Addus HomeCare Corporation
Coordinated Home Health Care LLC
N/A
Long-Term Care
Acquirer
Target
Price
Regional Owner/Operator
Ladiga Manor
$3.5 million
Senior Housing Properties Trust
Chandler House
$9.9 million
Regional Operator
Regal Estate/Bradford Place
$3.25 million
American Realty Capital Healthcare Trust
Gardens at Westlake
$22.5 million
Capitol Seniors Housing
Parkrose Estates
$17 million
Capitol Seniors Housing
Sugarland Hills
$15.6 million
Frontline Management
Villa Pueblo Senior Living Community
$3.65 million
Deal of the Week
For a few months we have been speculating that Newcastle Investment Corp., one of the ponies in Fortress Investment Group’s stable, may take a run at all or some of the Holiday Retirement Corporation properties. After all, Newcastle and Holiday are both controlled by Fortress, so the negotiations should be somewhat easy. We didn’t think they had the financial wherewithal to take all of the remaining assets after Ventas took a small, but expensive slug a few weeks ago. Now Newcastle has announced it is buying 52 Holiday independent living communities for approximately $1.01 billion, or close to $171,600 per unit. Just before it made the announcement, Newcastle announced it would be selling 50 million shares in a secondary offering which would net them at least $250 million if the underwriters exercise their overallotment option. The offering was priced overnight for gross proceeds of $264.9 million. They will use these funds plus non-recourse debt to fund the acquisition. Occupancy for these 52 properties was 50.5% on September 30, and they are located in 24 states. Newcastle will lease them back to Holiday with an initial yield of 6.5%, which comes to $11,150 per unit per year. The rent increase in the first three years will be 4.5% annually and then up to 3.75% in the following years. After this transaction closes, Holiday will have sold 78 of its approximately 333 properties, and it is close to the half-way point in raising the cash to pay off the looming maturities of Fannie Mae debt. With the Ventas and Newcastle deals combined, Holiday has raised $1.8 billion, and we believe there may be another announcement soon…. 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
Back in late 2010, Connecticut-based Athena Health Care Associates purchased five skilled nursing facilities in Massachusetts for $134,650 per bed, which we thought was quite high. Occupancy was 95%, but they were built, on average, about 40 years ago. They financed the acquisition with a $53 million bridge loan from TD Bank and $12 million in subordinated debt from Herbert J. Sims plus equity of $6.5 million. The intent was to have HUD provide the permanent financing in a few years, which we thought was quite risky given the price. Well, Sims has just closed on $51,086,500 in HUD debt to refinance the bank debt on four of the facilities with 428 beds, or $119,000 per bed. Mission accomplished….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
In the last three years, the average price per bed paid for skilled nursing facilities has ranged from $51,100 (2011) to $62,500 (2010), with 2012 falling in between at $60,400 per bed. Another way to look at it is the pricing by quartile. In 2012, the top quartile was $71,400 per bed, meaning that 25% of the skilled nursing facilities sold were sold at a price above that. The lower quartile was $37,300 per bed, meaning that 25% of the facilities were sold at a price below that. The median in 2012 was $57,400 per bed, which was a record for the skilled nursing sector….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 Steve Gilleland
In this “Expert Opinion” interview, Steve Gilleland, Managing Director, Healthcare Finance, CapitalSource Bank, discusses ALFs, CCRCs, mergers, SNFs, pro forma numbers, changes, and more….Watch the video
Wells Fargo Capital Finance
You need a lender who can deliver every step of the way
Healthcare is your business. Providing financing to healthcare companies so they can run smoothly and efficiently is ours. With the Healthcare Finance team at Wells Fargo Capital Finance, you get the proven reliability of a leader, along with the knowledge and experience you want. Plus, our financing can provide cash flow to keep the business running efficiently, or extra capital to help the business grow. To help maintain the well-being of your business, let’s start a conversation today. Call us at 1-877-770-1222 or visit us online at wellsfargocapitalfinance.com/healthcare-finance.php.
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