Kindred SNF Sell-Off Continues with $108M, 12-Property Deal

Kindred Healthcare, Inc.’s (NYSE: KND) exit from the skilled nursing industry continued Monday morning as the company announced the formal sale of 14 more SNFs.

The Louisville, Ky.-based operator offloaded 12 of those properties, along with four assisted living facilities, as part of an ongoing transaction with buyer BM Eagle Holdings. The 16 properties had a total price tag of $108 million, according to Kindred.

The two parties agreed to a blockbuster sale of 89 SNFs and seven assisted living properties for $700 million back in May, signaling Kindred’s permanent exit from the skilled nursing business. BM Eagle Holdings, a joint venture operated by affiliates of the New York City-based alternative asset management firm BlueMountain Capital Management, has bought 66 SNFs and four assisted living properties so far for $627 million.

“We continue to make great progress on our skilled nursing facility divestitures and believe we will complete the remainder of the closings by year end,” Kindred president and CEO Benjamin Breier said in a statement announcing the latest sales.

Under the terms of the deal, Kindred is also set to pay Ventas, Inc. — the Chicago-based real estate investment trust (REIT) that owns 36 of the 89 SNFs — $700 million, as the properties are sold to BlueMountain. Kindred shelled out $82.5 million to Ventas as part of the most recent transaction, with the overall total growing to $571 million; Kindred plans to realize value from the deal through $210 million in benefits associated with net operating losses, as well as reduced working capital requirements.

Kindred and BM Eagle closed on the first wave of SNFs in early September, with 54 of the total changing hands for $519 million.

Side deal

Kindred also announced the separate sale of two SNFs to buyers other than BlueMountain, bringing the total number involved in the mega-transaction down to 87. The two parties agreed to allow the sale of the two facilities for $400,000, Kindred announced.

BM Eagle has remained tight-lipped on its plans for the SNFs moving forward, though the Cincinnati-based CommuniCare announced it would be operating 16 of Kindred’s former SNFs in Indiana.

In addition, BM Eagle has already sold at least some of the properties acquired through the deal: As of Sunday, all seven former Kindred skilled nursing properties in Idaho are owned by CareTrust REIT (Nasdaq: CTRE) and operated by the Eagle, Idaho-based Cascadia Healthcare, as SNN first reported last month.

Written by Alex Spanko