Shareholders sign off on deal linking Sabra, CCP
CEO Matros: Expect additional acquisitions, diversification.
A giant new skilled nursing-assisted living chain was given birth in August, when shareholders of Sabra Health Care REIT and Care Capital Properties voted to approve a deal that would combine the two into one real estate investment trust.
Intention of the merger was first announced in May, but dissident shareholders held up the deal for months.
Sabra's management team, led by CEO Rick Matros, will lead the new behemoth, which will encompass 564 investments overall in 43 states. Its market capitalization was pegged at $7.4 billion.
Skilled nursing facilities will represent 73% of the portfolio; senior housing, 19%; and hospitals, 8%, according to a June presentation from Sabra. Thirty-six percent of the properties will be private-pay.
Some Sabra investors expressed concerns about the price tag, potential stock impact and strategic purpose.
But those opponents of the merger “knew nothing about the business” nor “the fundamentals of either skilled nursing or senior housing,” Matros told McKnight's.
He said the deal ultimately succeeded because of good communication with Sabra stockholders.
“At the end of the day, they [critics] had nothing else to offer,” Matros said.
He said that the deal is not likely to impact provider operations. He added that he expected the deal to “bring some value-add as we've done through our existing operating partners.”
Benefits could come through group purchasing, best practices and capital assistance, among other areas, he noted.
“I spent 30 years on the operating side before Sabra ... so we've been able to do some things in terms of referring services that positively impacted costs for our operating partners,” Matros said. “But other than that, we're a REIT, so it's their show to run.”