LOUISVILLE, Ky. (Oct. 3, 2016) – Kindred Healthcare, Inc. today announced that it has completed its previously announced agreement to sell 12 long-term acute care (LTAC) hospitals for $27.5 million to a group of entities operating under the name
“Curahealth,” which are affiliates of a private investment fund sponsored by Nautic Partners.
The hospitals have a total of 783 licensed beds in Arizona, Louisiana, Massachusetts, Oklahoma, Pennsylvania
“We are pleased to complete the sale of 12 LTAC hospitals to Curahealth, as this transaction creates both strategic and financial
value for Kindred, ” Benjamin A. Breier, President and Chief Executive Officer of Kindred, said. “Optimizing our LTAC hospital portfolio is a key element of our LTAC criteria mitigation strategy and this transaction significantly advances that strategy. Nautic has a proven track record of success in the healthcare sector and will be a strong partner for these hospitals and the communities they serve.”
For the full fiscal year 2016, Kindred expects that the hospitals will generate combined revenues of approximately $215 million and earnings before interest, income taxes, depreciation and amortization at approximately breakeven. The hospitals have $14 million of annual aggregate rent expense.
Kindred realized approximately $21 million of cash proceeds from this sale, subject to post-closing adjustments, with the remainder of the purchase price to be paid upon satisfaction of financial and other post-closing conditions. As previously announced, the company amended various master lease agreements with Ventas, Inc. in April 2016 in connection with the proposed transaction with Curahealth.
The transactions with Curahealth and Ventas are also expected to generate future cash income tax benefits for Kindred of approximately $37 million. Kindred anticipates reporting pretax charges of approximately $54 million related to the Ventas lease amendments and approximately $45 million to $55 million related to the transaction with Curahealth within fiscal 2016, of which approximately $8 million was recorded during the six months ended June 30, 2016.
“We are excited to complete this transaction with Kindred and look forward to providing high-quality healthcare to existing and future patients in the markets these hospitals serve,” said Chester Crouch, Chief Executive Officer of Curahealth.