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Healthcare Transactions Group Notes on Healthcare Mergers & Acquisitions

  • What is the Sale Price of Skilled Nursing Facility Bed Rights?

    What is the value of skilled nursing facility (SNF) “bed rights,” or sometimes called “CON beds” in an arms-length purchase and sale?  What are the issues and concerns?   Can they be sold?  Who owns them?  Are they a durable or perishable asset?  While Healthcare Transactions Group has conducted the sale of skilled nursing facilities, […]

  • A Word on M&A Intermediary Services and Fees

    The fundamental axiom regarding intermediary fees is that the fee and the amount of fee is in consideration for a constellation of services for originating, marketing, facilitating, negotiating and closing a deal, which go beyond merely introducing the parties or bringing the buyer and seller together.   Simply introducing parties to a transaction constitutes a finders’ fee […]

  • Sale Prices for Skilled Nursing Facilities Have Peaked

    Making economic predictions is a risky business.  Calling an inflection point is downright chutzpah.   So let me go ahead and predict anyway:  Sale prices for skilled nursing facilities have peaked.  I expect that sale prices for skilled nursing facilities will persist at their current high level for a while and slowly drift downward.  However, I […]

  • Sale of Skilled Nursing Facilities and Free Enterprise

    How real markets function always fascinates me.  Whether the behavior of real markets diverge from or substantiate economic theory is the pressing question.  In this case, I want to apply economic theory to better understand the active sale of standalone and independently-owned skilled nursing facilities, which is resulting in the extinction of the standalone and […]

  • Notes about 25th NIC National Conference

    I attended the 25 NIC National Conference – Investing in Seniors Housing and Care – at the National Harbor, Maryland, along with nearly 2,500 other individuals.   It was a great conference.   Below are my observations: The word “stabilize” is the biggest thematic takeaway for me.   What do I mean by that?   Prices have peaked and […]

  • Before Buying an Assisted Living or Skilled Nursing Facility, Please Define the Market Area

    Before buying an assisted living for skilled nursing facility, acquirers need to define the center’s existing and potential geographic market area boundaries. When evaluating the purchase of a skilled nursing facility or assisted living community, it vital to examine the underlying market and population demand and need. Too often, purchasers of nursing homes and assisted […]

  • Record High Skilled Nursing Facility Sale Price Paid

    There is a lot of talk that the market for the sale of skilled nursing facilities is a sellers’ market.   The market for the sale of skilled nursing facilities is so robust that when you read the headline “Record High Skilled Nursing Facility Sale Price Paid,” you shrug your shoulders; you are unimpressed.   Indeed, skilled […]

  • Sales of Skilled Nursing Facilities and Musical Chairs

    Sales of skilled nursing facilities is marked by intense activity and competition.  The market is highly robust.  Nursing home buyers outnumber nursing home sellers by a huge margin.  Sales of skilled nursing facilities happen after a couple of weeks or even days on the market before buyers make preemptive or compelling bids. Longtime owners and operators for […]

  • When it is Time to Sell Your Healthcare Business

    I am often asked by healthcare business owners, “when is the time to sell?”   The ideal is to sell at the top of the market.  In reality, the decision, thoughtfully and strategically considered, involves an analysis and understanding of internal factors and plans, the evolutionary stage of the enterprise, and a calculation of market […]

  • Sales of Skilled Nursing Facilities by Nonprofit Organizations

    There has been a high volume of sales of skilled nursing facilities by nonprofit and government entities. What is driving these sales? What is causing the rush to the exits? Will this trend continue? In this blog, we will focus on non-government nonprofit entities only because the reasons for their sale of nursing homes differ […]

  • Traits of Healthcare Transactions Likely to Close

    I am often asked “what are the properties of healthcare transactions that are likely to close.”   It is a good question because often corporate mergers & acquisitions professionals simply get the marching order “Close the Deal.”  Knowing these characteristics and planning accordingly is important.  They apply across healthcare sectors, whether it is the sale of […]

  • Skilled Nursing Facilities and Nursing Homes for Sale

    The selling and buying of skilled nursing facilities is a hyperactive-market.  By all indications, it is a seller’s market.  There are more buyers than sellers.  The buyers are either REITs, national chains, regional companies or fledging start-ups.  Regarding the start-ups, it seems that everybody wants to be in the nursing home, skilled nursing home or […]

  • Book Review: Health Care Mergers and Acquisitions Answer Book 2014

    Book Review:  Health Care Mergers and Acquisitions Answer Book 2014 by Mark Davis, MUP, MBA, President, Healthcare Transactions Group, Inc. Health Care Mergers and Acquisitions Answer Book 2014, Edited by Andrew L. Bab, Kevin A. Rinker, Debevoise & Plimpton LLP, New York: Practising Law Institute, 2014. 1,154 pages, $255.00 (print) As a healthcare mergers and […]

  • Healthcare Mergers and Acquisitions Jargon, Part 2

    • “Bandwidth” – buyer has ability to review and evaluate multiple deals • Indemnity – What seller has to provide to stand behind statements represented and warranted in a sale contract • MAC Provision – part of purchase contract that deals with material adverse events before closing • “CHOW” – In healthcare industry, there is […]

  • Healthcare Mergers and Acquisitions Jargon, Part 1

    • Middle-Market – Transactions generally under $1 billion and involve non-publicly-traded companies. • One-Off Deal – Purchase of a single facility or entity, not a multiple entity deal • Portfolio Deal – Multiple facility or service sale • “Deal Has Hair” – a complexities and complications of selling company • ‘’Tuck-in’’ Deal – small niche […]

  • Cap Rates Used In Skilled Nursing Facility Valuations

    The baseline metric for the valuation of a skilled nursing facility is the amount of Net Operating Income generated by operations, or more specifically, EBITDAR, consisting of Earnings before Interest, Taxes, Depreciation, Amortization and Rent, divided by rates of return specific to the nursing home industry (known as the “Capitalization Rates” or “Cap Rates”).  Cap […]