Omega Healthcare Investors, Inc. (NYSE:OHI) (“Omega”) today announced
the closing, effective as of November 27, 2013, of its previously
announced $525 million sale/leaseback transaction for 56 facilities
operated by Ark Holding Company, Inc. (“Ark Holding”). The
sale/leaseback transaction was consummated in connection with the
acquisition by merger of Ark Holding by 4 West Holdings, Inc. (“4 West”)
on November 27, 2013. Ark Holding was previously owned by private equity
firm Behrman Capital. As part of the transaction, Omega acquired title
to 55 skilled nursing facilities and 1 assisted living facility and
leased them back to the prior operators pursuant to a 50-year capital
lease with rental payments to Omega yielding 10.6% per annum over the
term of the lease.
The 56 facilities represent 5,717 licensed beds located in 12 states,
predominantly in the southeastern United States. The 56 facilities are
separated by region and divided among four cross-defaulted Master
Leases. The four regions include the Southeast (39 facilities), the
Northwest (7 facilities), Texas (9 facilities) and Indiana (1 facility).
The initial year one contractual rent is $47 million with 2.5%
escalators beginning in year five.
Founded by Behrman Capital in 2007 and based in Memphis, Tennessee, Ark
Holding (historically doing business as Covenant Dove) was one of the
largest privately held skilled nursing facility operators in the
country. New Ark Investment, Inc., as Ark Holding will now be known, has
nearly 5,500 employees. Two key employees, Christopher Murphy and
Michael Bagley have been retained by New Ark and will remain on as its
CEO (promoted from COO) and CFO, respectively.
4 West is an affiliate of Health Care Navigator (“HCN”) and is based in
White Plains, New York. HCN is a long term care consulting and advisory
company providing services to over 120 skilled nursing and assisted
living facilities, representing more than 14,000 beds throughout the
country.
Omega Healthcare Investors, Inc. is a real estate investment trust
investing in and providing financing to the long-term care industry. At
September 30, 2013, Omega owned or held mortgages on 477 skilled nursing
facilities, assisted living facilities and other specialty hospitals
with approximately 55,066 licensed beds (52,881 available beds) located
in 33 states and operated by 48 third-party healthcare operating
companies.
This announcement includes forward-looking statements. Actual results
may differ materially from those reflected in such forward-looking
statements as a result of a variety of factors, including, among other
things: (i) uncertainties relating to the business operations of the
operators of Omega’s properties, including those relating to
reimbursement by third-party payors, regulatory matters and occupancy
levels; (ii) regulatory and other changes in the healthcare sector,
including without limitation, changes in Medicare reimbursement; (iii)
changes in the financial position of Omega’s operators; (iv) the ability
of operators in bankruptcy to reject unexpired lease obligations, modify
the terms of Omega’s mortgages, and impede the ability of Omega to
collect unpaid rent or interest during the pendency of a bankruptcy
proceeding and retain security deposits for the debtor's obligations;
(v) the availability and cost of capital; (vi) competition in the
financing of healthcare facilities; (vii) Omega’s ability to maintain
its status as a real estate investment trust; and (viii) other factors
identified in Omega’s filings with the Securities and Exchange
Commission. Statements regarding future events and developments and
Omega’s future performance, as well as management's expectations,
beliefs, plans, estimates or projections relating to the future, are
forward-looking statements.
Copyright Business Wire 2013