Diversicare Healthcare Services (OTCQX: DVCR) this week announced the successful completion of a 10-building transfer that saw the skilled nursing operator exit the Kentucky market entirely.
The handoff was completed on August 30, according to a release from the Brentwood, Tenn.-based provider.
Diversicare had previously announced its intention to leave the Bluegrass State back in May, characterizing the decision as part of its overall strategic portfolio management plan.
“The decision to exit Kentucky after 25 years was not one that we took lightly,” CEO Jay McKnight said in a statement. “These facilities were staffed with and managed by a dedicated group of caregivers who are committed to providing high-quality services to the patients and residents we served. We believe this transaction demonstrates our continued execution of our strategic portfolio efforts and our commitment to focusing on our operations in other regions.”
The company now operates 62 skilled nursing and senior living facilities, with a total of 7,329 licensed beds.
The operator pulled off the deal in collaboration with landlord Omega Healthcare Investors (NYSE: OHI), which agreed to amend its master lease with Diversicare to shed the 885-bed Kentucky portfolio. The real estate investment trust (REIT) was in charge of finding a new operator for the facilities, according to Diversicare, though the identity of the tenant or tenants was not disclosed.
The deal was also contingent on Omega selling the properties, which officials at the REIT said in August was expected sometime during the third quarter at a price of approximately $85 million.
A spokesperson for Omega did not respond to a request for additional information about the potential sale as of press time.
Diversicare has taken several steps to turn around its recently shaky fortunes. Along with the Kentucky deal, McKnight pointed to the company’s planned participation in a Texas program that boosts Medicaid rates as a reason for optimism last month, as well as a $9.5 million deal with the federal government to settle a long-running probe into its therapy practices dating back to the start of the decade.
“We’ve made significant changes that we believe will improve our outlook,” he said during his company’s second-quarter earnings call.
The past month has also seen Diversicare lose its place on the Nasdaq exchange after officials rejected its appeal of an earlier de-listing warning; the company’s shares now trade over the counter.