Long-Term Care Deals the Healthcare Transaction Leader in 2018

Long-term care-related mergers and acquisitions topped all other segments in healthcare for deal volume in 2018, according to a new report from PwC.

Long-term care transactions represented 412 of 1,182 healthcare deals during the year, according to a report by the firm’s deals practice. Those transactions represented 35% of the volume — the largest percentage of any healthcare segment — and 10% of the value of all healthcare deals in 2018, according to PwC. The volume of long-term care deals was up 34.2% year-over-year, and value was down 21.1%.

Some of the more interesting recent transactions included:

  • ProMedica acquired HCR ManorCare in 2018 and its 239 skilled nursing facilities and its 58 assisted living facilities. With HCR ManorCare being the nation’s second largest post-acute and long-term care provider, this partnership has enabled ProMedica to significantly scale its system to become the 15th largest in the nation. The combined organization provides an unmatched breadth of services and capabilities, including: a hospital system, a physician group, telehealth, several health plans, an academic affiliation, skilled nursing, assisted living, rehab, home health and hospice. The acquisition also added more than $1 billion in debt to ProMedica’s previously very solid balance sheet.
  • The Ensign Group, Inc. is a holding company with no direct operating assets, employees or revenue. Ensign announced several recent acquisitions, includingtwo Idaho skilled nursing facilities, a continuing care retirement community in Kansas, an assisted living facility in Nevada, and another in Texas. That brings the Mission Viejo, CA, company’s portfolio to about 240 facilities, 188 of which are SNFs, and officials from the country’s fifth-largest nursing home chain said they’re eyeing more, though at a careful pace.
  • The Evangelical Lutheran Good Samaritan Society and Sanford Health have officially completed their merger. The merged organization now operates in 26 states, with more than $5 billion in annual revenue, 48,622 employees, more than 200 senior housing and care facilities, 44 medical centers, 482 clinics, 190,000 Sanford Health Plan members, 1,382 physicians, 973 advanced practice providers and 9,703 registered nurses delivering care in more than 80 specialty areas.
  • Sabra Health Care REIT purchased a 49% equity interest in a joint venture that owns 183 senior housing communities managed by Enlivant. Assisted living accounts for almost the entirety of the portfolio. The deal valued the 20-state, 8,280-unit portfolio at $1.62 billion, and Sabra’s 49% minority interest investment at $371 million.