South Carolina Nursing Home Blog : South Carolina Nursing Home Lawyer & Attorney : Poliakoff & Associates Law Firm : Elderly Care, Senior Care

There have been several articles about the recent sale of nursing homes by CapitalSource.  The articles are unclear about which nursing homes will be sold.  Below are links and information from several articles.

McKnight's wrote that CapitalSource, commercial lending company to many nursing home chains, will sell off its long-term care interests to Omega Healthcare Investors in a deal valued $860 million.   The sale covers a CapitalSource lease portfolio that includes 143 long-term care facilities.  Under the deal, Omega Healthcare Investors, which already owns or holds mortgages for 254 skilled nursing and assisted living facilities, will assume $529 million in asset-related debt, and give CapitalSource $280 million cash and $51 million in OHI stock.   A second article from McKnight states that CapitalSource Inc.,sold the last of its nursing home interests. This marks the company's exit from the skilled nursing ownership business.  The latest sale takes CapitalSource out of nursing home ownership, but it says it will continue to provide financing for owners and operators of long-term-care facilities.

CapitalSource sold the 37 nursing homes to an undisclosed buyer for an all-cash price of $100 million, the company said in a statement. The money will be used to pay down debts associated with the properties. The sale is part of a wider sale of its net lease portfolio, including the already disclosed divestiture of 143 skilled nursing facilities to Omega Healthcare Investors, Inc. CapitalSource will continue to provide financing for owners and operators in the long-term care industry, according to a company spokesman.

This final sale, along with the Omega sale and a Department of Housing and Urban Development mortgage financing deal, should net CapitalSource $495 million. The company said it would use these revenues to reduce the balance on its syndicated bank facility and add to overall company liquidity. The additional liquidity should put the company in a position to expand its healthcare lending franchise, the CapitalSource release said.

The Washington Post had an article on the sale stating that CapitalSource needed help to relieve the debt acquired during the recession.  CapitalSource is a specialty financing companies that has been hit hard by the credit crisis and the recession. Auditors at Bethesda-based American Capital issued an opinion earlier this year that the firm was in danger of not continuing as a business.  The company has disappointed analysts this year because of higher-than-expected losses on its loans to businesses and commercial real estate developers.

CapitalSource, which makes loans from $10 million to $100 million to nursing homes, said selling its 180 nursing homes is part of its transition to a bank. The company earlier this year changed its status from a publicly traded real estate investment trust to a bank.  James Pieczynski, who runs CapitalSource's health-care lending business, and Steven Museles, the company's chief legal officer, will become co-chief executives.

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Long-Term Living had an article about Sunrise Senior Living, Inc.'s $204 million sale transaction for 21 wholly owned assisted living communities, located in 11 states, with BLC Acquisitions, Inc., an affiliate of Brookdale Senior Living Inc.

At closing, Sunrise received approximately $60 million in net proceeds after payment or assumption of approximately $134 million of mortgage loans, the posting of required escrows, various prorations and adjustments, and payments of expenses by Sunrise. Sunrise will use $25 million of the proceeds to pay down its bank credit facility and will place $20 million into a collateral account for the benefit of other creditors.  None of it will go into improving care at their other nursing home facilities. Sunrise expects to record a gain of approximately $50 million in connection with the closing of this transaction.

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Bamberg County Council has given approval to a contract for the purchase, sale or lease of the Bamberg County Nursing Center to UHS-Pruitt Corp., a Georgia company.

The council, in a meeting Monday with the Hospital and Nursing Center Board, approved first reading of the contract which outlines the "conveyance of nursing home property and assets" to Toccoa, Ga.-based UHS-Pruitt Corp.

The county council at a Nov. 3 meeting approved a letter of intent with UHS-Pruitt to continue negotiations on all of its options in paying for hospital renovations, including the use of funds from the potential sale of the nursing center.  UHS-Pruitt has already applied for a certificate of need from the S.C. Department of Health and Environmental Control.  CON applications provide details about the particular need for a project. UHS-Pruitt is estimating the total cost of the project at $5,076,000.

Sara Maret, health planner for UHS-Pruitt, said state law required the company apply for a certificate of need for the nursing home project. Public notice of the application is also a state DHEC requirement, she said.

"They (Bamberg County) put the Bamberg Nursing Home up for sale because they wanted it to be a separate entity from the hospital," said Maret, noting that the company put the details of its application out so that pricing suggestions could be made and to show why the company "would be the better company" to purchase the nursing center.

Dobson-Elliott said the county itself has not published an amount for which the nursing center could potentially sell.

"It's a moving target. We've pulled all sales of nursing homes and like facilities in the state. When you break it down comparing size and when it was built, the numbers we're talking about are very good," she said.

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NHC Acquires Charleston, SC Facilities

National HealthCare Corporation (AMEX:NHC)(AMEX:NHC.PR.A), one of the nation’s leading operators of senior care services, announced today that it has added Trinity Mission Health and Rehabilitation of Charleston and Trinity Mission Assisted Living of Charleston in Charleston, South Carolina as affiliates effective August 1. NHC purchased the 132-bed skilled nursing and rehabilitation facility and the 60-bed assisted living facility for $13.25 million.

This acquisition increases NHC’s operations that are owned and managed in the South Carolina region to over 2,000 beds in 13 locations. The administrator for the new facilities, now renamed NHC HealthCare-Charleston and NHC Place-Charleston, is Angela Atkinson. Ms. Atkinson, previously with Trinity Mission of Charleston, joins NHC with 15 years of experience in healthcare administration, including licensure as both an assisted living and nursing home administrator.

“The superior quality of NHC’s services to the senior care community in the state of South Carolina is well known,” Steve Flatt NHC’s Senior Vice President of Development said. “While we have been a strong provider in the Upstate and Midland region for over 30 years, this additional location allows us to better serve the Low Country area as well. We are grateful for the help and cooperation of the staff of the center in making this a smooth transition.”

NHC has plans for more growth in the Low Country of South Carolina as construction is expected to start next month on a 120-bed skilled healthcare and rehabilitation center in Bluffton near Hilton Head Island.

NHC operates for itself and third parties 76 long-term health care centers with 9,772 beds. NHC also operates 32 homecare programs, seven independent living centers and 23 assisted living communities. NHC’s other services include managed care specialty medical units, Alzheimer’s units, hospice and a rehabilitation services company. Additional information about NHC, including the company’s Form 10-K, Form 10-Q, annual report and press releases, is available on our website at www.NHCcare.com.

Statements in this press release that are not historical facts are forward-looking statements. NHC cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHC’s best judgment as of the date of this release.

Contacts
National HealthCare Corporation
Gerald Coggin, Sr. V.P. Investor Relations, 615-890-2020

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I do not understand how nursing homes continue to say that they can't make any money taking care of their residents.  The corporate executives of Manor Care will get more than $200 million for their sale to the Carlyle Group.  See the article here.

The head of America’s biggest nursing-home company is about to get intensive financial treatment. 

Chief Executive Paul Ormond will receive $118 million to $186 million from cashing in his company stock when the deal is completed this year.  Sixteen other top executives and recently retired officers at the firm to be purchased by the Carlyle Group, of Washington, can receive a total of $68 million for their stock.

In total, Manor Care officials stand to receive $200 million or more from their stock holdings.

The amount to be paid by Carlyle, a global private-equity firm that owns stakes in more than 500 companies and real-estate developments, may not be known for weeks.

The buyer said it will purchase Manor Care for $6.3 billion and hopes to complete the deal by the end of the year.

Mr. Ormond, CEO and chairman of the company that had $167 million in profits on $3.6 billion in revenue last year, is typically among the top-compensated corporate CEOs locally each year. Last year, he was compensated $18.8 million, an SEC filing shows.

The biggest chunk of looming stock payouts from Carlyle are to Mr. Ormond, whose 1.8 million company shares will be worth more than $118 million. They could be worth another $68 million if options on another 1.9 million shares he has are exercised for prices ranging from $20 to $53 each.

But the most recent regulatory filings show $55.5 million in stock payments could go to R. Jeffrey Bixler, former vice president and general counsel; Geoffrey Meyers, former executive vice president and chief financial officer; and M. Keith Weikel, former senior executive vice president and chief operating officer.

Company officers, directors, key employees, and some retirees stand to collect about $200 million for their existing stock, and possibly more than $250 million if unexercised stock options can be cashed in, the new SEC filings show.

Manor Care, No. 565 on the Fortune 1,000 list of the largest U.S. corporations, was once part of Owens-Illinois Inc. and started acquiring health-care facilities in the early 1980s. It spun off and became Health Care & Retirement Corp. and in 1998 merged with Manor Care Inc. of Gaithersburg, Md.

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NEW YORK (MarketWatch) -- Manor Care Inc. has agreed to be acquired by private-equity firm Carlyle Group for about $6.3 billion in cash, the nursing-home operator said Monday.
Under terms of the deal, Manor Care's stockholders will receive $67 in cash for each share of common stock they own.
This represents a premium of less than 3% to Friday's closing price of $65.29, but it's 20% higher than Manor Care's $55.75 price on April 10, the day before the company announced it was exploring strategic alternatives.

This sale proves the healthy financial condition of the nursing home industry, and the lack of need for so called tort reform to insure their profitability.

for more information about Carlyle Group, click here.

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