Genesis To Exit Inpatient Operations In Eight Midwestern States - Quick Facts

(RTTNews) - Genesis HealthCare (GEN) announced its intention to exit inpatient operations in eight Midwestern states. The divestiture will occur in two phases. For 2016 year to date, Genesis has completed or announced divestitures of approximately 100 non-strategic or underperforming skilled nursing and assisted/senior living assets, as well as its hospice and home care businesses. Separately, the company reaffirmed its previously announced guidance ranges for fiscal 2016.

George Hager, Jr., CEO, said: "We are constantly reviewing our portfolio to determine areas of strength and weakness. The assets located in the eight Midwestern states account for 9% of inpatient revenues but have been a disproportionate drag on our earnings performance."

The first phase of the divestiture consists of the sale or divestiture of 18 facilities (16 owned and 2 leased) in the states of Kansas, Missouri, Nebraska and Iowa. The 18 facilities have annual revenue of $110.1 million and EBITDAR of $4.4 million. Sale proceeds of approximately $80 million, net of transaction costs, will principally be used to repay indebtedness. The second phase consists of the planned divestiture of 43 facilities in the states of Montana, Kentucky, Indiana and Ohio in a series of transactions. The 43 facilities have annual revenue of $322.0 million and EBITDAR of $50.4 million.