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Ensign Acquires Healthcare Center, Buyout Spree Continues

Sapna Bagaria

The Ensign Group, Inc. ENSG has acquired the real estate and operations of The Healthcare Center at Patriot Heights, a healthcare campus with 59 skilled nursing beds and 158 independent living units located in San Antonio, Texas. The acquisition was effective Jan 1, 2020. These operations are running at an occupancy rate of approximately 80%.

This acquisition will enhance the company’s operations in Texas and solidify its existing business in the San Antonio market. The Healthcare Center, which offers skilled nursing and independent living services, is an excellent geographic fit with sister operations in the area.

This acquisition brings Ensign's growing portfolio to 214 skilled nursing operations, 23 of which also include assisted living operations, across thirteen states.  Ensign owns the real estate at 90 healthcare operations.

This acquisition is in line with the company’s strategy to acquire real estate and to lease both well-performing and struggling skilled nursing, assisted living and other healthcare related businesses throughout the United States.

Ensign Group has been on an acquisition spree for skilled nursing facilities. This is in line with the comments by the company on its most recent earnings call about its capacity to keep growing on the back of multiple successful projects.

Ensign Group has a tradition of acquiring distressed healthcare operations that require significant clinical, financial and cultural turnaround. The company has a track record of turning around most of its 260 acquisitions over the period of 20 years.

In 2019, the company made successful buyouts. However, it expects some acquisitions in the pipeline to be completed in the first quarter of 2020.

Ensign Group is also adding value to its real estate portfolio by improving the operating results in its owned operations and by acquiring additional real estate assets. Since spinning out 94 of its real estate assets to CareTrust REIT in 2014, the company has added 198 operations and acquired 81 real estate assets.

The stock has gained 11.5% compared with its industry’s growth of 1.5% in the past year.

 

It also fared better than other companies in the space such as Genesis Healthcare, Inc. GEN, which gained 5.9%, and Brookdale Senior Living Inc. BKD and Capital Senior Living Corp. CSU, which lost 1.5% and 58.5%, respectively, in the past year.

Ensign Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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