Kindred Healthcare to sell skilled nursing facility business for $700 million
Staff Writer |
Kindred Healthcare has signed a definitive agreement with BM Eagle Holdings, a joint venture led by affiliates of BlueMountain Capital Management, under which it will sell the skilled nursing facility business for $700 million in cash.
Article continues below
The sale includes 89 nursing centers with 11,308 licensed beds and seven assisted living facilities with 380 licensed beds, which collectively have approximately 11,500 employees in 18 states.
As detailed below, Kindred expects that the combination of the cash proceeds, anticipated working capital liquidation, tax benefits, retained assets and other items will result in approximate total value to Kindred of $910 million after deducting estimated transaction and severance costs.
These results are consistent with the Company’s previously announced expectations.
As previously disclosed, 36 of the skilled nursing facilities are currently leased from Ventas and Kindred has an option to acquire the real estate of the Ventas Properties for aggregate consideration of $700 million.
As Kindred closes on the sale of the Ventas Properties to BlueMountain, Kindred will pay to Ventas the allocable portion of the $700 million purchase price for the Ventas Properties and Ventas will convey the real estate for the applicable Ventas Property to BlueMountain or its designee.
Kindred expects to realize net value of approximately $210 million, subject to post-closing adjustments, and after the $700 million payment to Ventas, estimated transaction costs of approximately $35 million and estimated severance costs of approximately $35 million.
This amount includes approximately $80 million in retained net working capital, the majority of which will be liquidated over late 2017 and early 2018, approximately $140 million of cash tax benefit over time from the creation of an approximately $380 million net operating loss carryforward associated with the sale transaction, and approximately $60 million of value associated with the retained Las Vegas facility, hospital-based sub-acute units and other retained assets. ■