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News Update For the week ended April 08, 2016
Selected Industry Headlines

April 7, 2016 – Genesis HealthCare (GEN) announced that it has named Richard A. Feifer, MD, MPH, FACP as Chief Medical Officer of Genesis Physician Services (GPS). In this newly created position, Dr. Feifer will lead a team of nearly 400 full- and part-time physicians and nurse practitioners who provide more than 600,000 visits annually to residents and patients of Genesis HealthCare. 

Prior to joining Genesis, Dr. Feifer served as Aetna’s Chief Medical Officer of National Accounts. He led Clinical Consulting, Strategy, and Analysis, which helped our nation’s largest employers improve the health and productivity of their members.  Before Aetna, Dr. Feifer served as Vice President of Clinical Program Innovation and Evaluation at Medco, where he was responsible for the organization’s portfolio of care enhancement programs. A graduate of Brown University and the University of Pennsylvania School of Medicine, Dr. Feifer is a board-certified internist with experience in primary care, geriatrics, and urgent care medicine at the Fallon Clinic.  He received his MPH in Health Services Management from Columbia University, and is currently an Assistant Clinical Professor at the University of Connecticut.

“We are thrilled to have Dr. Feifer join the management team at Genesis,” states Chief Executive Officer, George V. Hager, Jr.   “Dr. Feifer’s professional focus and passion is in the design, implementation, evaluation, and communication of strategies to optimize population health, and to improve the quality and efficiency of healthcare. Given his area of expertise, he will be integral to our efforts to actively transition from volume-based, fee for service to value-based care and reimbursement.”

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April 6, 2016 – Ventas, Inc. (VTR) announced that it will issue its first quarter 2016 earnings release prior to the opening of trading on the New York Stock Exchange on Friday, April 29, 2016. A conference call to discuss those earnings will be held the same day at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).


April 6, 2016 – National Health Investors, Inc. (NHI) announced that it has purchased 8 skilled nursing facilities in Texas for $118.5 million totaling 931 beds. The facilities are currently operated by NHI’s existing tenant, Legend Healthcare (“Legend”). Legend has elected to transition all of its current operations to a new operator and NHI has agreed to enter into a new 15-year master lease with affiliates of The Ensign Group, Inc. (ENSG) on 15 former Legend facilities for an initial annual amount of $17.75 million plus an annual escalator based on inflation. 

The lease has two 5-year renewal options. Upon entering the new lease, which is subject to usual and customary closing conditions, and is expected to close May 1, 2016, NHI will sell 2 of its existing facilities in Texas totaling 245 beds to affiliates of Ensign for $24.6 million. Upon entering the new lease, which will include a corporate guaranty from Ensign, the purchase options held by Legend will terminate. The net acquisitions and dispositions bring NHI’s net investment in the 15 facilities to approximately $211 million.

In addition, and as part of the transaction with Legend and Ensign, NHI has committed to purchase 4 skilled nursing facilities in Texas from Legend for $56 million and lease to Ensign. The facilities are in various stages of development and the purchase window for the first facility is expected to open in 2017.

Eric Mendelsohn, CEO and President of NHI, stated, “This new lease with Ensign further exemplifies NHI’s commitment to forming relationship-oriented partnerships with best-in-class operators. We are thrilled to add Ensign as a leading tenant in our skilled nursing portfolio.”

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April 5, 2016 – Healthcare Realty Trust, Inc. (HR) announced that on Wednesday evening, May 4, 2016, after the market closes, it expects to report results for the first quarter of 2016. On May 5, 2016, at 9:00 a.m. Central Time, Healthcare Realty Trust expects to hold a conference call to discuss earnings results, quarterly activities, general operations of the Company and industry trends.


 

April 4, 2016 – Ventas, Inc. (VTR) announced that it and Kindred Healthcare, Inc. (KND) (“Kindred”) have entered into several agreements (the “Agreements”) to improve the quality and productivity of the long term acute care hospital (“LTAC”) portfolio leased by Ventas to Kindred. 

Certain of the Agreements consist of lease amendments (“Lease Amendments”) to existing master leases between Ventas and Kindred (the “Master Leases”). Under these Lease Amendments, annual rent on seven identified LTACs (the “7 LTACs”), which is currently approximately $8 million, will immediately be re-allocated to other more productive post-acute assets currently leased by Kindred from Ventas under the Master Leases. Total annual rent on Ventas’s post-acute care portfolio operated by Kindred will remain the same as its current level.

“We are pleased to reach another value-creating agreement for shareholders of both Ventas and Kindred, which also deepens our collaborative partnership, and further strengthens Kindred’s position as the nation’s leading provider of post-acute care,” Ventas Chairman and CEO Debra A. Cafaro said. “These agreements accelerate Kindred’s efforts to position its LTAC business for success under LTAC patient criteria, while also enhancing the quality of our portfolio for our shareholders,” she added.

Separately, Ventas has agreed to sell the 7 LTACs, but closing remains subject to conditions to closing, including the receipt of all licensure, regulatory and other approvals. Ventas expects to receive $6.5 million in connection with the sale transactions.

These transactions are expected to better position the Ventas portfolio to succeed under the new LTAC patient criteria to be implemented by Kindred beginning on September 1, 2016.

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April 4, 2016 – Kindred Healthcare, Inc. (KND) announced that it has signed a definitive agreement to sell 12 long-term acute care (“LTAC”) hospitals (the “Hospitals”) to Curahealth, LLC (“Curahealth”), an affiliate of a private investment fund sponsored by Nautic Partners, LLC (“Nautic”), for $27.5 million. The Hospitals have, in aggregate, 783 licensed beds in Arizona, Louisiana, Massachusetts, Oklahoma, Pennsylvania, and Tennessee. 

Benjamin A. Breier, President and Chief Executive Officer of Kindred, commented, “We are pleased to announce this sale of 12 LTAC hospitals to Curahealth, as this transaction creates both strategic and financial value for Kindred. Optimizing our LTAC hospital portfolio is a key element of our LTAC criteria mitigation strategy and this transaction is another important step forward in our efforts. 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 (“EBITDA”) at approximately breakeven. The Hospitals have $14 million of annual rent expense, of which approximately $8 million is with seven facilities leased from Ventas, Inc. (“Ventas”) (VTR).

Separately, Kindred has amended various master lease agreements with Ventas and has filed today an 8-K with details of these amendments.

Kindred expects to realize cash proceeds upon closing the transaction with Curahealth of approximately $21 million, subject to post-closing adjustments, with the remainder of the purchase price to be paid upon satisfaction of financial and other post-closing conditions. In addition, the transactions with Curahealth and Ventas are expected to generate future cash income tax benefits for Kindred of approximately $38 million. Kindred anticipates reporting pre-tax 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. Kindred expects to close the transaction with Curahealth in the third quarter of 2016, subject to customary conditions to closing, including the receipt of all licensure, regulatory and other approvals. 

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SEC Filings

Date Company Type Description
4/07/2016 National Health Investors, Inc. 8-K
On April 7, 2016, National Health Investors, Inc. issued a press release announcing that it has purchased 8 skilled nursing facilities in Texas for $118.5 million totaling 931 beds. The facilities are currently operated by NHI’s existing tenant, Legend Healthcare (“Legend”). Legend has elected to transition all of its current operations to a new operator and NHI has agreed to enter into a new 15-year master lease with affiliates of The Ensign Group, Inc. (NASDAQ: ENSG) on 15 former Legend facilities for an initial annual amount of $17.75 million plus an annual escalator based on inflation. The lease has two 5-year renewal options. Upon entering the new lease, which is subject to usual and customary closing conditions, and is expected to close May 1, 2016, NHI will sell 2 of its existing facilities in Texas totaling 245 beds to affiliates of Ensign for $24.6 million. Upon entering the new lease, which will include a corporate guaranty from Ensign, the purchase options held by Legend will terminate. The net acquisitions and dispositions bring NHI’s net investment in the 15 facilities to approximately $211 million.

 

In addition, and as part of the transaction with Legend and Ensign, NHI has committed to purchase 4 skilled nursing facilities in Texas from Legend for $56 million and lease to Ensign. The facilities are in various stages of development and the purchase window for the first facility is expected to open in 2017.

4/06/2016 Medical Properties Trust, Inc. 8-K On April 6, 2016, Medical Properties Trust, Inc. issued a press release announcing that on April 3, 2016, Mr. L. Glenn Orr, Jr., age 75, retired as a member of the board of directors (the “Board”), and the number of directors on the Board decreased to seven members. Mr. Orr had been a member of the Board and its various committees since February 2005, and the Company expresses its appreciation and thanks to Mr. Orr for his 11 years of service and for his many contributions.
4/04/2016 New Senior Investment Group, Inc. 8-K On April 4, 2016, New Senior Investment Group, Inc. issued a press release announcing that the board of directors of the Company has appointed Mr. Bhairav Patel, 37, as Chief Accounting Officer effective as of March 30, 2016. Mr. Patel is a Managing Director in the Private Equity group of the Company’s manager, FIG LLC, which is an affiliate of Fortress Investment Group LLC (“Fortress”). Mr. Patel joined Fortress in 2007 and has served in various capacities within the corporate accounting and finance divisions and was until recently the head of Fortress’s financial planning & analysis group. Prior to joining Fortress in 2007, Mr. Patel served as an accounting manager at GSC Group, a credit-based alternative investment manager. Mr. Patel received a Bachelor’s degree and Master’s degree in Commerce from the University of Mumbai, and is a Certified Public Accountant.
4/04/2016 Kindred Healthcare, Inc. 8-K On April 4, 2016, Kindred Healthcare, Inc. issued a press release announcing that, in connection with the sale of twelve long-term acute care hospitals (collectively, the “Hospitals”) to Curahealth, LLC, Kindred Healthcare, Inc. (“Kindred” or the “Company”) entered into amendments to certain of its master lease agreements with Ventas, Inc. (“Ventas”) on April 3, 2016 to transition the operations of seven of such Hospitals which are leased from Ventas (the “Ventas Hospitals”). The Ventas Hospitals will remain leased under the applicable master lease agreement until the closing of the sale. Kindred will pay a fee to Ventas of $3.5 million following signing of the amendments and an additional $2.958 million upon the closing of the Sale of the Ventas Hospitals. Ventas will pay Kindred 50% of the sales proceeds for the real estate (after deduction of Ventas’ closing costs) attributed to the Ventas Hospitals in the Sale, which is anticipated to be immaterial.

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