Kindred Healthcare provides update on skilled nursing facility divestiture
Kindred Healthcare announced that it has completed additional transaction closings related to its previously announced agreement with BM Eagle Holdings, a joint venture led by affiliates of BlueMountain Capital Management, to sell the company's skilled nursing facility business. Since October 1, 2017, the Closings included 12 skilled nursing facilities and one assisted living facility. Sale proceeds from the Closings aggregated approximately $31M. To date, the company has completed the sale of 80 skilled nursing facilities and five assisted living facilities for aggregate proceeds of approximately $658M. Kindred also announced that it has reached an agreement with BlueMountain and the relevant landlord to close five leased facilities in Massachusetts. None of the original purchase price with BlueMountain was allocated to these five facilities. The Company has transferred the day-to-day operations of these facilities to a third party and expects the closing of these facilities will be completed in the second quarter of 2018. In addition to these five facilities, the company continues to make progress on the sale of its remaining five skilled nursing facilities and one assisted living facility. Certain of these remaining six facilities are likely to be sold outside of the definitive agreement with BlueMountain, because in some cases other parties have exercised rights of first refusal or similar rights to purchase. Kindred expects approximately $27M of additional net proceeds from the sales of the remaining facilities. The completion of the remainder of the sales are subject to final documentation and customary conditions to closing, including the receipt of all licensure, regulatory and other approvals. Kindred expects that the remainder of the closings will occur as regulatory and other approvals are received over the remainder of 2017 and through the first half of 2018. In addition, the company has for sale a parcel of real property and various certificates of need related to its skilled nursing facility business that it estimates will generate additional proceeds ranging from $7M-$10M. Benjamin Breier, President and CEO of Kindred, commented, "We have substantially completed the divestiture of our skilled nursing facility business and continue to make steady progress on the sale of a few remaining facilities. We continue to believe that the sale of our skilled nursing facility business will significantly enhance shareholder value, enable us to sharpen our focus on higher margin and faster growing businesses, and further advance our efforts to transform Kindred."