Sabra Health Care REIT (NASDAQ:SBRA) said it entered into an agreement to acquire four skilled nursing facilities for $97.5 million on Monday.
Located in the Mid-Atlantic region with a total of 500 beds, the facilities will be operated under a long-term lease and is expected to provide an initial yield on cash rent of 8.75%. Three of the facilities are relatively new, built between 2005 and 2009, and the fourth, built in 1996, is currently under renovation.
“These assets are premier rehabilitation, skilled nursing and long-term care facilities in the Mid-Atlantic Region, with an excellent management team,” said Rick Matros, CEO and Chairman of Sabra. “Operating out of modern, purpose-built facilities, these facilities are able to care for medically complex patients as well as those requiring rehabilitation after a hospital stay.”
Sabra said the acquisition accelerates its diversification from Sun Healthcare Group and adds new markets to its geographic footprint.
“Our purchase agreement took into careful consideration the current Medicare reimbursement environment, which resulted in a purchase price that we believe provides a fair valuation for these assets, while taking into consideration the uncertainty around this issue,” Matros said.
The deal is subject to customary conditions, including the satisfactory completion of Sabra’s due diligence investigation. The company expects the transaction will close during the third quarter of 2011. Signal Hill Capital Group LLC is acting as exclusive financial advisor to the sellers in connection with this transaction.
Sabra also announced it closed on the acquisition of Oak Brook Health Care Center in Whitehouse, Texas on June 30, 2011.