PACS Group Announces Pending Acquisition of Operations at 12 Skilled Nursing Facilities in Tennessee
PACS Group (NYSE: PACS) has announced plans to acquire operations of 12 skilled nursing facilities in Tennessee, totaling 1,310 skilled nursing beds. The facilities will be leased from CareTrust REIT through a long-term, triple net lease agreement. The lease includes purchase options for six facilities between years four and seven. The acquisition marks PACS's entry into Tennessee and is expected to close in Q4 2024, subject to customary closing conditions.
PACS Group (NYSE: PACS) ha annunciato piani per acquisire le operazioni di 12 strutture di assistenza specializzata nel Tennessee, per un totale di 1.310 posti letto di assistenza specializzata. Le strutture saranno affittate da CareTrust REIT attraverso un contratto di locazione a lungo termine, con triplo netto. Il contratto di locazione include opzioni di acquisto per sei strutture tra il quarto e il settimo anno. L'acquisizione segna l'ingresso di PACS in Tennessee e si prevede che si concluda nel quarto trimestre del 2024, soggetta a condizioni di chiusura abituali.
PACS Group (NYSE: PACS) ha anunciado planes para adquirir las operaciones de 12 instalaciones de cuidados especializados en Tennessee, con un total de 1.310 camas de cuidado especializado. Las instalaciones serán arrendadas de CareTrust REIT a través de un contrato de arrendamiento a largo plazo, triple neto. El arrendamiento incluye opciones de compra para seis instalaciones entre el cuarto y séptimo año. La adquisición marca la entrada de PACS en Tennessee y se espera que se cierre en el cuarto trimestre de 2024, sujeto a condiciones de cierre habituales.
PACS 그룹 (NYSE: PACS)는 테네시주에 있는 12개 숙련 간호 시설의 운영을 인수할 계획을 발표했습니다. 총 1,310개의 숙련 간호 병상이 있습니다. 시설은 CareTrust REIT로부터 장기, 트리플 넷 임대 계약을 통해 임대될 것입니다. 이 임대 계약에는 4년에서 7년 사이에 6개 시설에 대한 구매 옵션이 포함되어 있습니다. 이번 인수는 PACS가 테네시에 진입하는 것을 의미하며, 2024년 4분기에 종료될 것으로 예상되며, 관례적인 종료 조건에 따라 달라질 수 있습니다.
PACS Group (NYSE: PACS) a annoncé des plans pour acquérir les opérations de 12 établissements de soins spécialisés dans le Tennessee, totalisant 1 310 lits de soins spécialisés. Les établissements seront loués à CareTrust REIT à travers un contrat de location à long terme, triple net. Le contrat de location inclut des options d'achat pour six établissements entre la quatrième et la septième année. Cette acquisition marque l'entrée de PACS dans le Tennessee et devrait être finalisée au quatrième trimestre 2024, sous réserve des conditions de clôture habituelles.
PACS Group (NYSE: PACS) hat Pläne angekündigt, die Betriebe von 12 Fachpflegeeinrichtungen in Tennessee zu erwerben, mit insgesamt 1.310 Fachpflegebetten. Die Einrichtungen werden von CareTrust REIT über einen langfristigen, drittes Netto-Leasingvertrag angemietet. Der Vertrag enthält Kaufoptionen für sechs Einrichtungen zwischen dem vierten und siebten Jahr. Die Akquisition markiert den Eintritt von PACS in Tennessee und soll im vierten Quartal 2024 abgeschlossen werden, vorbehaltlich der üblichen Abschlussbedingungen.
- Expansion into new market with 1,310 skilled nursing beds
- Strategic real estate purchase options for 6 facilities
- Long-term triple net lease structure providing operational stability
- Significant lease obligations with triple net structure
- Execution risk in integrating 12 facilities simultaneously
- Transaction closing uncertainty with conditions pending
Insights
This strategic acquisition marks a significant expansion into Tennessee's healthcare market, adding 1,310 skilled nursing beds across 12 facilities. The deal structure is particularly noteworthy with its purchase options for 6 facilities between years 4-7, providing PACS with valuable real estate flexibility. The triple-net lease arrangement with CareTrust REIT transfers operational responsibility while minimizing immediate capital requirements.
The timing aligns with increasing demand for skilled nursing facilities due to aging demographics. Tennessee's healthcare market presents growth opportunities due to its favorable regulatory environment and growing elderly population. This expansion represents approximately an 8-10% increase in PACS's operational footprint, making it a material transaction for the company's growth strategy.
The Q4 2024 closing timeline suggests careful due diligence and integration planning, which is important for maintaining service quality and operational efficiency during the transition.
The structured lease agreement with CareTrust REIT demonstrates sophisticated real estate strategy. The purchase options on 6 facilities create valuable optionality, allowing PACS to potentially capitalize on real estate appreciation while maintaining operational control. This hybrid approach - leasing with future purchase rights - helps optimize capital allocation and maintain balance sheet flexibility.
The triple-net lease structure shifts property expenses to PACS but typically comes with lower base rents, improving overall economics. Tennessee's real estate market has shown steady appreciation, making the purchase options potentially valuable future assets. The delayed closing timeline suggests complex property transfer arrangements and regulatory approvals are being carefully managed.
The facilities will be leased from an affiliate of CareTrust REIT (NYSE: CTRE), pursuant to the terms of a long-term, triple net lease. The lease includes options for us to purchase the real estate on six of the facilities, between years four and seven of the lease.
“Tennessee has been an attractive market for PACS for some time, and we’re grateful for this opportunity to bring our model of post-acute care to the Volunteer State. We’ll be thrilled to welcome the great staff and residents of these facilities to the PACS family,” said Jason Murray, PACS Chairman and CEO.
Josh Jergensen, PACS President and COO, added: “We’re excited to work with these great facilities, as well as for PACS to enter another new state. When the transaction closes we’ll plan to continue to leverage our decentralized leadership model, as well as our prior experience with these types of larger portfolio acquisitions, to integrate the new facilities into the PACS family expeditiously. We’re looking forward to serving them and their communities.”
The acquisition is subject to customary closing conditions, and there can be no assurance that the transaction will close in the anticipated timeframe, or at all. The Company anticipates that the transaction will close in the fourth quarter of 2024.
Forward Looking Statements
Statements in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to substantial risks and uncertainties. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “would,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements include, among others, the anticipated closing of the acquisition, and are based on PACS’ current expectations, forecasts, and assumptions, are subject to inherent uncertainties, risks and assumptions that are difficult to predict, and actual outcomes and results could differ materially due to a number of factors, including: if we fail to complete the acquisition; if we fail to successfully integrate the business and operations of the facilities in the expected timeframe or at all; and if we continue to incur substantial expenses related to the acquisition and the related integration of the facilities, if consummated. Other risks and uncertainties include those described more fully in the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in our Quarterly Report on Form 10-Q for the three months ended June 30, 2024, and in PACS’ other reports filed with the
About PACS™
PACS Group, Inc. is a holding company investing in post-acute healthcare facilities, professionals, and ancillary services. Founded in 2013, PACS Group is one of the largest post-acute platforms in
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029331988/en/
Investors: IR@pacs.com
Media: Brooks Stevenson
VP Corporate Communication
262 N. University Avenue
T: 385-988-3596
brooks.stevenson@pacs.com
https://www.pacs.com
https://ir.pacs.com
Source: PACS Group, Inc.
FAQ
How many skilled nursing facilities is PACS acquiring in Tennessee?
When is PACS expected to close the Tennessee facilities acquisition?
What are the real estate purchase options in PACS's Tennessee facilities lease?
Who is PACS leasing the Tennessee facilities from?
