Ensign Group in 'very selective' acquisition mode
The Ensign Group is actively seeking acquisitions but is growing by being “very selective with each potential acquisition opportunity,” executives said Thursday during the organization's first-quarter earnings call.
The company is open to real estate and leasing transactions involving both well-performing and struggling assisted living, skilled nursing and other healthcare-related businesses, in markets in which it currently operates as well as markets it does not, President and CEO Christopher Christensen said.
The company continued to grow in the first quarter and afterward.
During the quarter, Bridgestone Living, Ensign's assisted living and independent living portfolio company, acquired the real estate and operations of Cedar Hills Senior Living, a 37-unit assisted living facility in Cedar Hill, TX, and Deer Creek Senior Living, a 37-unit assisted living facility in DeSoto, TX, said Ensign Executive Vice President and Secretary Chad Keetch.
Tuesday, Ensign announced that Keystone Care, its Texas-based portfolio subsidiary, had acquired the real estate and operations of Dallas continuing care retirement community Grace Presbyterian Village, formerly operated by Presbyterian Communities and Services. The community, which now will be known as The Villages of Dallas, has 81 independent living units, 36 assisted living units, 26 memory care units and 125 skilled nursing beds.
“This acquisition adds to our expanding footprint in the Dallas area and adds to our ability to accelerate the quality of care we can provide to our patients and their loved ones,” Keetch said.
Ensign also recently announced that Bandera Healthcare, the company's Arizona-based portfolio company, had acquired the real estate and operations of Peoria Post Acute and Rehabilitation, a 128-bed skilled nursing facility in Peoria, AZ, effective April 1. The purchase includes an adjacent 50-bed long-term acute care hospital that currently is operated by a third party under a lease arrangement.
“We are being very selective with each potential acquisition opportunity, and we have carefully chosen each of these operations because of the potential we see to enhance the clinical and financial outcomes,” Keetch said.
Ensign's portfolio now includes 183 skilled nursing operations, 22 of which also include assisted living operations; 51 assisted and independent living operations; 22 hospice agencies; 20 home health agencies; and four home care businesses across 15 states, he said. The company also now owns the real estate at 67 of its 234 healthcare facilities, Keetch added.
Regarding first-quarter performance, Christensen said the company was “pleased” with the “outstanding results” of its assisted living and home health businesses.
“Bridgestone Living ... grew its segment revenue and income by 12% and 5%, respectively, over the prior-year quarter,” he said.
Assisted and independent living resident fee revenue was $36 million in the quarter, according to a news release issued before the call.
Average monthly revenue per unit in the independent living and assisted living segment was $2,858, an increase of 0.7% over the same quarter last year, when the average rate was $2,838, Ensign said.
Earnings before interest, taxes, depreciation and amortization from independent living and assisted living operations was $6.3 million, up from $6.1 million in the same quarter of last year, according to the company.
Independent living and assisted living occupancy was 75.5% in first quarter, down 1.3% from the rate of 76.8% during the same period last year.