The Ensign Group (Nasdaq: ENSG) and its captive real estate company Standard Bearer are off to a busy start in July, adding five skilled nursing facilities and one campus to its operations and five real estate assets to the portfolio.
These transactions bring the total number of acquisitions in 2022 to 21, the company’s fastest pace since 2016, according to a note published this week by Stifel analysts.
“This shows management could source and execute on acquisitions at attractive terms despite still aggressive pricing,” analysts wrote. “With a number of reimbursement-related headwinds on the horizon, we believe there will be plenty of opportunities for Ensign to further accelerate external growth by consolidating weaker operations and growing its real estate portfolio.”
Stifel analysts predict there will be more acquisition opportunities for Ensign in the second half of 2022, and the company’s strong liquidity position should allow it to close deals as more operators look to exit the space.
Ensign’s new SNF operations in Texas include The Eden of Las Colinas, a 118-bed facility in Irving; Pleasant Valley Healthcare and Rehabilitation Center, a 124-bed facility in Garland; Millbrook Healthcare and Rehabilitation Center, a 124-bed facility in Lancaster; McKinney Healthcare and Rehabilitation Center, a 125-bed facility in McKinney; and Park Manor Bee Cave, a 140-bed facility in Bee Cave.
The Eden of Las Colinas acquisition includes the real estate, which was acquired by Standard Bearer Healthcare REIT, Ensign’s captive real estate company. The four other deals are subject to a long-term, triple net lease, according to a news release announcing the deals.
Stifel analysts mentioned in a note published in May following a virtual non-deal roadshow with Ensign executives that Texas markets in particular are a potential growth area for the operator.
The San Juan Capistrano, Calif.-based post-acute health care services provider and investor sees itself as an “incubator of new business,” as all of Ensign’s subsidiaries are profitable.
On the same day, Ensign announced that Standard Bearer also acquired real estate in California, including Premier Care Center of Palm Springs, a 99-bed SNF in Palm Springs; Brookside Healthcare Center, a 97-bed skilled nursing facility in Redlands; and Broadway Villa Post Acute, a 138-bed SNF in Sonoma.
Standard Bearer also acquired the real estate and operations of Villa Maria Post Acute and Rehabilitation, a 65-bed SNF; Villa Maria Wellness Living, a 31-bed assisted living facility; and Tucson Recovery at Villa Maria, a 30-bed behavioral health unit, each located in Tucson, Ariz.
Finally, Ensign additionally announced that its affiliate entered into a new long-term lease for Henderson Health and Rehabilitation, a 266-bed SNF located in Henderson, Nev.
The acquisitions, effective July 1, bring Ensign’s growing portfolio to 258 healthcare operations, 26 of which also include senior living operations, across 13 states. Ensign subsidiaries, including Standard Bearer, now own 105 real estate assets.
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