This closing includes 12 skilled nursing facilities and four assisted living facilities. Sale proceeds from the closing were approximately $108 million.
In addition, 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.”
As previously disclosed, Kindred entered into a definitive agreement with BlueMountain under which it sells 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., 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. read about the complex arrangements in The Lane Report
Losses of $685.6 million in the third quarter of 2016 led to the decision to exit the skilled-nursing facility business. In response, CEO Benjamin Breier said
“We are taking proactive strategic steps to position Kindred for long-term success against the backdrop of dynamic changes in the health care services industry, Our plan to exit the skilled nursing facility business, together with the significant cost realignment initiative we are undertaking in connection with the exit, are substantial steps forward in our continuing effort to transform Kindred’s strategy and growth profile to enhance shareholder value.”
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