Skilled Healthcare Group, Inc. (NYSE: SKH) said its Board of Directors is exploring strategic alternatives to maximize stockholder value, including a potential sale of the company’s real estate assets or the whole company.
The company has engaged JP Mortgage Securities LLC to assist in analyzing whether the current favorable market conditions may enhance stockholder value.
“There can be no assurance that the Board of Directors will ultimately conclude that a strategic transaction is in the best interests of the Company or its stockholders at this time, or that the exploratory process will result in a transaction being consummated,” said the company in a statement. “No timetable has been set for completion of the Board of Directors’ review, and the Company does not intend to announce further developments in the process until the Board of Directors either completes its review or the Company enters into a transaction.”
Based in Foothill Ranch, California, the company had trailing twelve month revenue of approximately $820 million and approximately 14,600 employees as of December 31, 2010.
Its subsidiaries operate skilled nursing facilities and assisted living facilities, together comprising over 10,500 licensed beds. Skilled Healthcare Group subsidiaries collectively own approximately 74% of these facilities, which are located in California, Texas, Kansas, Missouri, New Mexico, Nevada and Iowa and are generally clustered in large urban or suburban markets.
The company’s real estate portfolio could be the key to attracting an offer according to RBC Capital Markets analyst Frank Morgan.
“The company’s 77 percent ownership in its portfolio represents a very attractive asset that management could monetize, and with recent real estate deals in the skilled nursing industry we believe the time is right to do so,” wrote Morgan in a note to clients.