Providence Group has acquired California’s second-largest skilled nursing facility operator as the company expands its presence out west, the company announced this week.
The deal with Plum Healthcare Group, which closed on Nov. 5 for an undisclosed sum, includes the operations of 58 total facilities — 57 nursing homes and one assisted living/independent living facility — and the real property on 10 of the assets.
Fifty-four of the facilities are located in California, and four facilities are in Nevada. Capital Funding Group provided financing for the deal.
Providence Group CEO Jason Murray told Skilled Nursing News that while the company doesn’t typically target deals of this size, Plum Healthcare’s strong clinical outcomes and its complementary footprint to the company’s pre-existing portfolio made it an attractive partnership.
“We have long admired Plum as a clinical leader in our space and this transaction represents an opportunity to bring together two operating groups that share the same passion for quality care,” Murray said.
Chief Financial Officer Mark Hanock echoed Murray’s sentiments in a provided statement.
“We appreciate the many groups and individuals that helped successfully close this transaction, Capital Funding Group and so many others that helped make this happen. We’ve always admired and respected Plum and look forward to continuing their legacy,” Hancock said.
Plum’s average census as of Nov. 5 was 83%, according to Murray.
Plum’s ability to care for higher acuity patients is a trend Murray wants to see continue — especially as that care becomes an increasingly large part of the patient population.
“The marriage of these two companies I think allows us to learn from one another and continue to improve what we’ve already achieved as individual companies, and so together I think that’s going to make us that much stronger,” Murray said.
Back in 2019, Plum Healthcare announced it was building a new $22.5 million skilled nursing development in the Bay Area that would focus specifically on short-term, high acuity rehabilitation.
In a recent interview with Skilled Nursing News, Plum’s CEO Cory Christensen said the facility was “substantially completed” and they were only waiting on the certificate of occupancy.
With the acquisition, Providence’s subsidiaries now operate more than 140 skilled nursing facilities in seven states, including California, Kentucky, Missouri, Nevada, Ohio, South Carolina and Texas.
The combined company has over 20,000 employees on a consolidated basis.
Subsidiary Providence Administrative Consulting Services (PACS), which contracts with facilities to provide “back office administrative support”, will do the same for Plum’s facilities.
In addition to “essentially all” facility-based personnel, Murray said the majority of the leaders at Plum will continue in their current roles following the deal.
Murray and Hanock have previous ties with Plum as the two met while working for the California-based operator.
Providence will take some time to “digest” the deal and integrate Plum into the portfolio, but they are looking to expand further.
Murray described Providence’s acquisition strategy as “opportunistic in nature.”
“We are looking to grow and we have deals that are already in the queue now that we’re evaluating, but all of that is outside of California at this point,” he said.