[UPDATED] Skilled Nursing Giant PACS Group Files for IPO as It Looks to Expand Footprint

PACS Group filed for an initial public offering with the Securities and Exchange Commission (SEC) on Wednesday, citing focus on growth plans in its filing.

“As we continue to grow, we intend to explore additional purchases of real-estate assets, through purchase options or right-of-first refusals in existing leases, as well as acquisitions and de novo construction of purpose-built facilities,” the company’s SEC filing states.

The Farmington, Utah-based PACS Group is one of the largest skilled nursing providers with more than 200 nursing facilities across nine states and serves over 20,000 patients daily. It plans to list on the NYSE under the symbol PACS. 


Of its acquisition strategy, PACS noted its success in transforming “under-performing” facilities into those with high Star ratings, saying that the average 5-Star Quality rating of even its “Mature” facilities stood at 4.2 at the end of 2023, with an average occupancy rate of 93%. These metrics exceed the average 5-Star rating and occupancy levels for “New” facilities in the sector of 3.9 and 87%, respectively.

“We have historically grown primarily through our disciplined and balanced acquisition strategy. We aim to create value by identifying and acquiring underperforming custodial care facilities and converting them into higher-value short-term transitional care facilities by investing in clinical teams and processes and upgrading technology, equipment, training, staffing, aesthetics, and other aspects of the business,” the SEC filing states.

As of December, the company leased 165 facilities, directly owned the real estate at 29 facilities, and owned partial interests in an additional 14 facilities through joint ventures managed by third parties, the filing noted.


Execs share insights on growing footprint

PACS portfolio of owned and leased properties is currently located in Arizona, California, Colorado, Kentucky, Missouri, Nevada, Ohio, South Carolina and Texas.

“We anticipate that available acquisition opportunities will enable us to further penetrate our reach into these nine states and to enter new states in the future,” the SEC filing shared. “Our current markets are attractive and that the states in which we operate each has unique benefits, such as favorable reimbursement dynamics, high barriers to entry, or population growth of adults aged 65 and older, which is our primary patient demographic.”

In the weeks leading up to the IPO filing, PACS executives spoke to Skilled Nursing News about how the organization plans to aggressively expand its footprint to avail efficiencies from scaling up – and what that entails in terms of a change to their operations.

Mark Hancock, previously CFO since the company’s founding in 2013 and who has now transitioned to the role of executive vice chairman where he said he will provide guidance on driving the company’s growth, told SNN, “We’re taking over facilities that are underperforming,” he said. “[These facilities] have been mismanaged, creating the opportunity for us to come in, and provide a better clinical product. Through the efficiencies that PACS Services provides, some of the benefits of scale [come into play] where we can make their lives easier – and that is all reflected in the care metrics. It’s reflected in the occupancy. It’s reflected in the referrals.”

The decentralized model

Sally Cantwell, senior VP of Organizational Development at PACS, told SNN that with PACS expanding in multiple regional markets, a decentralized model is key to their success.

“All of our administrators and DONs, friends and clinical staff on site make their decisions, but then we have robust regional clinical teams that consult and mentor,” she said. “We don’t compromise on our clinical processes.”

In facilities operated by PACS, Cantwell said her company makes improvements to teams and spaces so as to make them more desirable environments. “Talent of high quality [nurses] really changes the landscape inside our facility,” she said. “So, having well-trained, highly-educated [staff], and attractive places [help] to recruit high quality staff.”

Executives also highlighted their ability to improve payments from managed care partnerships, saying that for starters, they prioritized understanding each facility’s skilled mix.

“With your managed care, [it’s important] you understand what your skilled mix is, that you understand the type of patients you’re bringing in and then can appropriately align care with the billing model,” she said. “The more you understand that, the more intentional you can be.”

In its SEC filing, PACS notes that this decentralized model is aided by its subsidiary, PACS Services, which the filing notes is key “to rapid integration of new facilities and provides our local leadership teams with an effective technology infrastructure, support tools, and regional support teams that allow local leadership to focus on operational improvements.”

Ultimately, in giving its local leaders operational autonomy, PACS said that the decentralized model enables not only improvements in care but also referral volumes and occupancy rates.

For 2023, PACS Group reported $3.1 billion in revenue for the 12 months ended December 31, 2023.

The joint bookrunners on the IPO deal are Citi, J.P. Morgan, Truist Securities, and RBC Capital Markets. PACS Group filed confidentially on December 8, 2023. 

“We will file additional materials with the SEC in due course. At this time, we don’t have further comment on the registration statement or the IPO process due to securities law limitations,” a PACS spokesperson told Skilled Nursing News.

Also this month, CareTrust REIT (NYSE:CTRE) announced adding 210 skilled nursing beds and 24 assisted living units to its existing master lease with affiliates of PACS Group, which have been operating the facilities for a third-party landlord. The deal was worth $55.6 million for three SNFs across Texas and Missouri, bringing the total number of beds under the CareTrust and PACS relationship to over 1,200.

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