Kindred Healthcare Inc has sold its nursing facility business to BlueMountain Capital Management LLC for $700 million in cash. The nursing facility portfolio included 89 nursing centers and seven assisted living facilities in 18 states.
LOUISVILLE, Ky.–(BUSINESS WIRE)–Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced that it has completed an additional transaction closing (the “Closing”) related to its previously announced agreement with BM Eagle Holdings, LLC, a joint venture led by affiliates of BlueMountain Capital Management, LLC (“BlueMountain”), to sell the Company’s skilled nursing facility business for $700 million in cash.
12 skilled nursing facilities and four assisted living facilities. Sale proceeds from the Closing were approximately $108 million. To date, the Company has completed the sale to BlueMountain and affiliated buyers of 66 skilled nursing facilities and four assisted living facilities for aggregate proceeds of approximately $627 million.
Benjamin A. Breier, President and Chief Executive Officer of Kindred, commented, “We continue to make great progress on our skilled nursing facility divestitures and believe we will complete the remainder of the closings by year end. The sale of our nursing facility operations should significantly enhance shareholder value, focus our attention to our higher margin and faster growing businesses, and advance our efforts to transform Kindred.”
Mr. Breier continued, “On behalf of the Kindred Board of Directors and management team, I thank all of our caregivers for their hard work to facilitate another smooth transfer process. We appreciate and respect their dedication to our patients, residents and their families.”
As previously disclosed, Kindred entered into a definitive agreement with BlueMountain under which it will sell the Company’s skilled nursing facility business for $700 million in cash. The Company’s skilled nursing facility portfolio included 89 nursing centers and seven assisted living facilities in 18 states. Thirty-six of these skilled nursing facilities (the “Ventas Properties”) were or continue to be leased from Ventas, Inc. (“Ventas”) (NYSE:VTR), and Kindred has an option to acquire the real estate of the Ventas Properties for an aggregate consideration of $700 million. As Kindred closes on the sale of the Ventas Properties, Kindred will pay to Ventas the allocable portion of the $700 million purchase price for the Ventas Properties and the real estate for the applicable Ventas Property will be conveyed to BlueMountain or another designee. In connection with the Closing described above, Kindred paid approximately $82.5 million to Ventas for seven Ventas Properties that were included in the Closing. To date, the Company has paid in aggregate approximately $571 million to Ventas for the Ventas Properties involved in all of the completed closings.
In addition to the Closing above, Kindred also transferred its interest in two skilled nursing centers to parties unrelated to BlueMountain. These two skilled nursing facilities were previously included in the definitive agreement with BlueMountain but Kindred and BlueMountain agreed to allow the sale to other unrelated parties. Kindred received approximately $400,000 in proceeds from these transfers.
The completion of the remainder of the closings pursuant to the definitive agreement with BlueMountain are subject to customary conditions to closing, including the receipt of all licensure, regulatory and other approvals. Kindred expects that the remainder of the closings will occur in phases as regulatory and other approvals are received. Kindred expects that all of the closings will be completed by year end.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-100 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $6.1 billion(1). At June 30, 2017, Kindred’s continuing operations, through its subsidiaries, had approximately 88,100 employees providing healthcare services in 2,540 locations in 45 states, including 81 long-term acute care hospitals, 19 inpatient rehabilitation hospitals, 19 sub-acute units, 614 Kindred at Home home health, hospice and non-medical home care sites of service, 102 inpatient rehabilitation units (hospital-based) and contract rehabilitation service businesses which served 1,705 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for eight years, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.
(1) Revenues from continuing operations for the last twelve months ended June 30, 2017.