Home » Kindred Healthcare to transition operations of nine nursing centers to Ventas

Kindred Healthcare to transition operations of nine nursing centers to Ventas

Will take effect when current leases expire

LOUISVILLE, Ky. (Dec. 29, 2014) — Kindred Healthcare, Inc. today announced it has entered into an agreement with Ventas, Inc. to transition the operations under the leases for nine non-strategic nursing centers. Each lease will terminate when the operation of the nursing center is transferred to a new operator. The current lease term for eight of these nursing centers is scheduled to expire at the end of April 2018. The current lease term for the ninth of these nursing centers is scheduled to expire at the end of April 2020.

FLBB_Kindred-LogoKindred and Ventas have also reached agreements to modify provisions in the 2007 master leases to make them more consistent with Master Lease Agreement No. 5, the most recent master lease entered into between the parties, and to reimburse Ventas for certain deferred capital expenditures at healthcare facilities previously transferred to new operators. Kindred will pay an aggregate of $40 million in connection with the agreements in January 2015, which payments are expected to be tax deductible.

The nine nursing centers where operations will be transferred contain 903 licensed nursing center beds and generated revenues of approximately $65 million for the year ended Dec. 31, 2013. The current annual rent for these facilities approximates $10 million. Kindred will continue to operate these facilities until operations are transferred, but their operating results will be reflected in discontinued operations through the expiration of the lease term. If such transfers are not completed by Dec. 31, 2015, Kindred’s base rent obligations for such facilities will decrease by 50 percent until the transfers are complete. These transactions are expected to be nominally accretive to both Kindred’s consolidated earnings per diluted share in 2014 and its lease adjusted leverage.