Tuesday, June 16, 2015
Genesis HealthCare, one of the nation’s largest providers of post-acute care, today announced that it has signed an asset purchase agreement with Revera Inc. (Revera), a leading owner, operator and investor in the senior living sector, to acquire 24 of its skilled nursing facilities along with its contract rehabilitation business for $240 million. The transaction is expected to close by this calendar year-end, subject to additional due diligence, regulatory and licensing approvals, and other customary conditions.
Under the agreement, Genesis will acquire the real estate of 20 of the 24 facilities and will enter into a long-term lease agreement with Health Care REIT, Inc. (HCN) for the remaining properties. Genesis will also acquire the operations of Premier Therapy, Revera’s contract rehabilitation business. Genesis expects to finance the transaction utilizing a bridge loan from HCN and will subsequently refinance the bridge loan utilizing the HUD financing program or other traditional mortgage financing. Genesis expects the transaction will be accretive to 2016 earnings.
The 24 centers are located in the following states: eight in New Jersey, five in Vermont, three in Washington, two in Connecticut, two in Massachusetts and one in each of Maryland, Virginia, New Hampshire and Rhode Island. The 24 centers encompass an aggregate of 3,056 beds, employ approximately 3,800 full and part-time employees and had aggregate revenue totaling approximately $280 million in 2014.
“The transaction is a good geographic fit for us, adding high-quality assets and density to our core markets in the northeast, New Jersey and the state of Washington,” states George V. Hager, Jr., Genesis’ Chief Executive Officer. “The transaction also aligns nicely with our growth and deleveraging objectives, as it will be accretive to earnings, increase our fixed charge coverage and expand facility ownership to 23% of our inpatient sites.”
“This transaction supports Revera’s new strategic direction to focus the company on its core strengths in senior living, enabling investment in growth and innovation in its private pay portfolio across Canada, the United States and the United Kingdom,” said Thomas G. Wellner, President and CEO of Revera. “We are pleased that our Nursing and Rehab team will continue to serve seniors under new ownership that shares our focus on quality care.”
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