The Ensign Group Announces Expansion in California

Rhea-AI Summary

The Ensign Group, Inc. (Nasdaq: ENSG) has announced an agreement to acquire twenty skilled nursing operations in California from Sabra Health Care REIT, Inc. (Nasdaq: SBRA). This transaction is pending regulatory approvals and is expected to finalize by February 1, 2023. Ensign will establish two long-term master leases with terms of 18 and 20 years. Following the acquisition, Ensign’s portfolio will grow to 286 healthcare operations and 108 owned real estate assets. CEO Barry Port highlighted the strategic fit of these acquisitions with their existing markets.

Positive

• Acquisition of 20 skilled nursing operations expands Ensign's portfolio significantly.
• Long-term master leases enhance stability and predictability of cash flows.
• Strategic alignment with existing markets strengthens Ensign's operational footprint.

Negative

• Transaction size is larger than typical for Ensign, introducing integration risks.
• Dependence on regulatory approvals adds uncertainty to the acquisition timeline.

SAN JUAN CAPISTRANO, Calif., Nov. 07, 2022 (GLOBE NEWSWIRE) -- The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign™ group of companies, which invest in and provide skilled nursing and senior living services, physical, occupational and speech therapies, other rehabilitative and healthcare services, and real estate, announced today that it has agreed to acquire twenty skilled nursing operations in the state of California, subject to the completion of certain regulatory approvals and other closing conditions. These operations are all owned by Sabra Health Care REIT, Inc. (“Sabra”) (Nasdaq: SBRA) and will transition to Ensign affiliated operating companies subject to a new, long-term triple net master lease.

Barry Port, Ensign’s Chief Executive officer commented, “We are honored that Sabra will be entrusting us with the operation of this portfolio and are very excited to expand our growing relationship with them. These California operations are a perfect fit with our existing footprint in some of our strongest and most mature markets. While this transaction is larger than our typical tuck-ins, our locally-driven approach to acquisitions allows us to rely on our many CEO-caliber leaders in these markets to direct the transitions of each operation in the same way we execute on a one-or two-building acquisition. We look forward to working together with the outstanding leaders and teams already in place in these operations to build on the strong clinical and operational reputations they have earned in their communities.”

Commenting on the news, Rick Matros, CEO and Chair of Sabra, said, "This is an opportunity to expand our relationship with Ensign, substantially improving the credit profile of our portfolio."

The transaction will include 20 properties located in California to two master leases with Ensign operating companies with initial terms of 18 and 20 years, each with an accompanying corporate guarantee from The Ensign Group, Inc. In addition, Ensign expects to sublease three of the operations located in the greater Sacramento area to a third-party operator, subject to Sabra’s consent. The transition of these facilities is expected to be completed by February 1, 2023, upon the satisfaction of all closing conditions.

Upon closing this transaction, Ensign’s growing portfolio will consist of 286 healthcare operations, 3 subleases and 108 owned real estate assets. Mr. Port reaffirmed that the organization is actively seeking several other transactions to acquire real estate and to lease both well-performing and struggling skilled nursing, senior living and other healthcare related businesses throughout the United States.

About Ensign(TM)

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and senior living services, physical, occupational and speech therapies and other rehabilitative and healthcare services at 269 healthcare facilities in Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, South Carolina, Texas, Utah, Washington and Wisconsin. More information about Ensign is available at http://www.ensigngroup.net.

About Sabra

Sabra Health Care REIT, Inc., a Maryland corporation, operates as a self-administered, self-managed real estate investment trust (a "REIT") that, through its subsidiaries, owns and invests in real estate serving the healthcare industry throughout the United States and Canada.

Contact Information

The Ensign Group, Inc., (949) 487-9500, ir@ensigngroup.net

SOURCE: The Ensign Group, Inc. 

FAQ

What is the latest acquisition by The Ensign Group, Inc. (ENSG)?

The Ensign Group, Inc. has announced an agreement to acquire twenty skilled nursing operations in California from Sabra Health Care REIT, Inc.

When is the expected completion date for Ensign's acquisition of nursing operations?

The acquisition is expected to be completed by February 1, 2023, pending regulatory approvals.

How many healthcare operations will Ensign have after the acquisition?

After the acquisition, Ensign's portfolio will consist of 286 healthcare operations.

What are the terms of the leases involved in Ensign's new acquisition?

The acquisition will include two master leases with initial terms of 18 and 20 years.

What is the impact of the acquisition on Ensign's market presence?

The acquisition strengthens Ensign's operational footprint in some of its most mature markets.