More than a year after falling into a court-mandated receivership, 22 senior housing and care facilities previously run by Atrium Health & Senior Living are tentatively set to change hands in a few weeks.
North Shore Healthcare on Friday announced that it had reached an agreement to buy the portfolio, which consists of 16 post-acute care properties and six assisted living communities — primarily in Wisconsin, with a single site in Michigan.
The Glendale, Wis.-based North Shore still must receive formal court approval and licenses from the Wisconsin Department of Health Services before taking over the facilities as owner-operators, with a target transaction date of December 1.
The terms of the deal were not disclosed.
“Our goal is to really be that premium regional provider, and when you have density, you can create efficiency,” North Shore CEO David Mills told SNN Friday. “You can create synergy. It really creates a unique opportunity that we really wanted to go after.”
The 22 properties were part of a larger group of 33 Atrium facilities that a court ordered into receivership back in September 2018. This past winter, four Atrium post-acute facilities shut their doors “after carefully reviewing all options,” receiver Michael Polsky said at the time.
Seven Atrium buildings remain in receivership, according to a joint statement issued by Polsky, North Shore, and the Minnesota-based Health Dimensions Group, which had overseen operations at the soon-to-be-sold facilities on an interim basis.
“I am pleased that we have identified a strong owner and operator for a significant portion of the Atrium-Midwest portfolio,” Polsky said in the Friday statement. “I appreciate the expertise and efforts of HDG and the Atrium-Midwest care center teams to continue and strengthen the care and service provided to residents during the receivership.”
The receivership process exists as an alternative to bankruptcy proceedings when skilled nursing operators hit financial difficulties: Troubled nursing homes, either voluntarily or at the request of landlords, cede day-to-day operations to a caretaker company that works to maintain resident care until a permanent owner or operator can take over.
“We are happy to learn a permanent operator has been found for these centers,” Health Dimensions Group CEO Erin Shvetzoff Hennessey said in the statement. “We will do everything we can to ensure a successful transition. We will miss the wonderful colleagues and friends we have made along the way.”
The transaction marks the latest in North Shore’s impressive growth over the last few years. After launching in 2015 with a pair of properties, the operator has swelled to 44 skilled nursing facilities and five AL communities in Wisconsin, Minnesota, and North Dakota — not including the 22-building infusion set to close next month.
The company isn’t a stranger to stepping into receivership situations: North Shore in 2017 took over 25 facilities, including 21 SNFs, from the Milwaukee-based Fortis Management Group — which had previously bought the properties from the Canada-based Extendicare.
North Shore has also based its growth push on a largely regional strategy, which Mills told SNN presents significant opportunities — both for his company and other similarly sized players.
The footprint of the acquisition overlaps with some of North Shore’s existing territories; the company had competed with Atrium for both referrals and employees in the past, Mills said.
But North Shore plans to use redundancy to its advantage, potentially developing specialized “clusters” of centers that offer dementia, mental health, cardiac, or orthopedic care — a strategy that Mills described as creating “complementary products.”
“We’ll be able to develop some, I think, really creative and attractive ways to not only be the provider of choice, but the employer of choice,” Mills said.