Kindred Healthcare Inc. confirmed in July its previously announced plan to exit the skilled nursing facility industry.
Kindred announced that it had signed a definitive agreement with BM Eagle Holdings LLC, to sell its skilled nursing business for $700 million. BM Eagle Holdings is a joint venture headed by affiliates of BlueMountain Capital Management LLC.
The Kindred sale includes 89 nursing centers and seven assisted living facilities with a total of more than 11,680 licensed beds across 18 states. The company expects the combination of cash proceeds, tax benefits, anticipated working capital liquidation and other items involved in the sale will result in around $910 million total value.
Kindred also confirmed its plans to purchase 36 facilities from Ventas for $700 million, with the real estate investment trust conveying the real estate of the facilities to BlueMountain. With that agreement, Ventas also will remove most of its exposure to the skilled nursing business.
“With the sale of 36 skilled nursing assets, we are improving our portfolio and enhancing our ability to deliver reliable growth and income for our shareholders,” said Ventas CEO Debra Cafaro in a release. “Upon the expected sale, our skilled nursing rent will be only one percent of our total business.”
Kindred officials reported that the skilled nursing exit will increase the provider’s annual cash flow by around $20 million to $30 million, and reduce its annual capital expenditures by $30 million.
“Exiting the skilled nursing facility business, in its entirety, has been a long-stated goal of our enterprise,” explained Kindred President and CEO Benjamin Breier. “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.”