PACS Group Completes Acquisition of Skilled Nursing Facilities in Tennessee

Rhea-AI Summary

PACS Group (NYSE: PACS) has completed the acquisition of 11 skilled nursing facilities in Tennessee, adding 1,310 skilled nursing beds to its portfolio. A 12th facility is expected to close in Q1 2025. Since October 31, 2024, PACS has acquired 38 facilities totaling 4,700 skilled nursing beds, expanding its presence to 17 states.

The company reports strong operational performance with a 4.0 average Quality Measure star rating across its skilled nursing portfolio and above-industry-average facility occupancy. PACS maintains a robust balance sheet with ample liquidity to support continued growth and value creation.

Positive

• Significant portfolio expansion with 38 new facilities and 4,700 beds since October 2024
• Strong operational metrics with 4.0 average Quality Measure star rating
• Above-industry-average facility occupancy rates
• Robust balance sheet with ample liquidity
• Geographic expansion to 17 states

Negative

• None.

Insights

Healthcare Industry Analyst

The acquisition of 11 skilled nursing facilities in Tennessee marks a significant expansion for PACS, adding 1,310 beds to their portfolio. This strategic move, combined with recent acquisitions totaling 38 facilities and 4,700 beds since October, demonstrates aggressive growth execution. The company's 4.0 average Quality Measure star rating and above-industry occupancy rates indicate strong operational performance. The expansion into Tennessee, their 17th state, suggests effective geographic diversification and market penetration strategy. The robust balance sheet mentioned suggests financial capacity for further acquisitions, while their decentralized leadership model could help maintain quality standards across the expanding network. This expansion significantly increases PACS's market presence and revenue potential in the growing senior care sector.

Financial Analyst

This acquisition represents substantial portfolio growth for PACS, with the Tennessee facilities alone increasing their capacity by 1,310 beds. The company's rapid expansion pace - 38 facilities in just two months - signals strong execution of their growth strategy. The mention of a "robust balance sheet with ample liquidity" suggests healthy financial positioning for future acquisitions. Above-average occupancy rates are particularly noteworthy as they typically translate to stronger revenue generation and operational efficiency. The decentralized management approach could help maintain profitability while scaling operations. The pending 12th facility closure in Q1 2025 indicates continued momentum in their expansion strategy. This aggressive growth trajectory, combined with strong operational metrics, positions PACS well for potential revenue and market share gains.

FARMINGTON, Utah--(BUSINESS WIRE)-- PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”) announced today that independent operating subsidiaries of the Company closed on the operations of 11 skilled nursing facilities in Tennessee on December 1, 2024, which collectively comprise 1,310 skilled nursing beds; a 12^th facility in Tennessee is expected to close in the first quarter of 2025, subject to the satisfaction of applicable closing conditions. With the expansion into Tennessee, PACS has now acquired a total of 38 facilities since October 31, 2024, adding 4,700 skilled nursing beds to its portfolio.

“We're excited to close these latest acquisitions, which further expand PACS’ footprint to 17 states, bringing our services to more communities than ever before,” said Jason Murray, PACS Chairman and CEO. “The business remains on solid footing and we are continuing to execute on our growth strategies by seeking prudent acquisitions and leveraging our decentralized leadership model to provide the highest quality of care to our communities. Supported by a robust balance sheet with ample liquidity, we remain well positioned to drive continued growth and value creation for all of our stakeholders.”

Josh Jergensen, PACS President and COO, added: “As we enter new markets and continue to operate our business, we remain focused on our mission to revolutionize the delivery, leadership, and quality of post-acute care. We continue to see strong operational performance across our network, evidenced by a 4.0 average Quality Measure star rating across all PACS facilities in our skilled nursing portfolio and total facilities occupancy above industry averages. Our strong operating metrics have continued through October and we believe our continued success in these metrics gives insight into the overall health and strength of our organization.”

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 the United States. Its independent subsidiaries operate 314 post-acute care and senior living facilities across 17 states, serving over 30,000 patients daily. References herein to the consolidated “Company,” as well as the use of the terms “we,” “us,” “our,” “its” and similar verbiage, refer to PACS Group, Inc. and its consolidated subsidiaries, taken as a whole. PACS Group, Inc. and its subsidiaries that are not licensed healthcare providers do not provide healthcare services to patients, residents or any other person, and do not direct or control the provision of services provided or the operations of those provider subsidiaries. All healthcare services are provided solely by its applicable subsidiaries that are licensed healthcare providers, under the direction and control of licensed healthcare professionals in accordance with applicable law. More information about PACS is available at https://IR.pacs.com.

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 U.S. Securities and Exchange Commission. Forward-looking statements contained in this announcement are based on information available to PACS as of the date hereof and are made only as of the date of this release. PACS undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing PACS’ views as of any date subsequent to the date of this press release. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of PACS.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205063655/en/

Investors: IR@pacs.com

Media: Brooks Stevenson

VP Corporate Communication

262 N. University Avenue

Farmington, UT 84025

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 did PACS Group acquire in Tennessee in December 2024?

PACS Group acquired 11 skilled nursing facilities in Tennessee on December 1, 2024, with a 12th facility expected to close in Q1 2025.

What is the total number of skilled nursing beds added to PACS (NYSE: PACS) portfolio since October 31, 2024?

PACS has added 4,700 skilled nursing beds to its portfolio through the acquisition of 38 facilities since October 31, 2024.

What is the current Quality Measure star rating for PACS Group's skilled nursing facilities?

PACS Group maintains a 4.0 average Quality Measure star rating across all its skilled nursing facilities.

How many states does PACS Group (NYSE: PACS) now operate in after the Tennessee acquisition?

Following the expansion into Tennessee, PACS Group now operates in 17 states.