Kindred Healthcare Divests Nursing Facility Business

Kindred Healthcare said on Saturday that it has signed a definitive agreement with BM Eagle Holdings, LLC, a joint venture led by affiliates of BlueMountain Capital Management, LLC, under which it will sell the company’s skilled nursing facility business for $700 million in cash. The sale includes 89 nursing centers with 11,308 licensed beds and seven assisted living facilities with 380 licensed beds, which collectively have 11,500 employees in 18 states. 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, Inc.(VTR), 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.

By Bryan Smith