California-based provider The Ensign Group, Inc. (NASDAQ:ENSG) is expanding its reach in the Midwest through the acquisition of 15 assisted living operations located throughout Wisconsin, the company announced Monday.
The communities comprise the entirety of Menomonee Falls, Wis.-based Harmony Living Centers, LLC’s portfolio. As part of the transaction, Ensign assumed a long-term master lease from Harmony, which includes an option to purchase all of the real estate.
Chicago-based speciality investment bank Ziegler served as the investment bank in this transaction. Leading the sale was Bill Mulligan, Ziegler managing director and Nick Glaisner, senior vice president. The purchase price is not being disclosed, Glaisner told SHN.
The acquisition was effective Aug. 1. The Ensign Group is the parent company of the Ensign group of skilled nursing, rehabilitative care services, home health care, hospice care, assisted living and urgent care companies.
In January 2007, Ziegler assisted Harmony in negotiating and completing a $100 million sale-leaseback transaction with Wakefield Capital Management, Inc. in which Harmony continued operating the portfolio but parted with its real estate, Glaisner said. The communities are now part of a master lease structure with Ventas Inc. (NYSE: VTR).
“This acquisition represents a unique opportunity to bolster our footprint in the state of Wisconsin,” said Christopher Christensen, Ensign’s president and CEO, in a press release.
John Gurrieri, president of Bridgestone Living LLC, Ensign’s seniors housing subsidiary, expects these facilities, which had a combined occupancy rate of 83% at acquisition, to be mildly accretive to earnings in 2015.
The deal increases Ensign’s profile in a state that also is seeing notable senior living development. In particular, industry experts have recently hailed the Milwaukee Metropolitan Statistical Area (MSA) as a senior housing hot spot.
The portfolio includes properties throughout the state, including Madison. Willow Brooke Senior Living in the Central Wisconsin town of Stevens Point and Racine Commons Assisted Living, located between Milwaukee and Chicago, are the largest properties by unit count. They have 82 and 74 units, respectively.
In total, the portfolio represents 687 units.
This acquisition brings Ensign’s growing portfolio to 176 healthcare facilities, 27 of which are owned, 13 hospice agencies, 14 home health agencies, three home care businesses and 17 urgent care clinics across 12 states.
The latest acquisition follows last year’s purchase spree, which included The Ensign Group’s purchase of nearly the entire portfolio of one San Diego provider’s operations. The company currently is negotiating several other acquisitions involving both “well-performing and struggling” assisted living and other senior housing assets, Christensen said in the press release.
Written by Cassandra Dowell