Beverly Enterprises Inc., the nation's largest nursing home operator, said Monday it has signed an agreement to sell its Florida properties for $165-million in cash to NMC of Florida LLC.
The sale includes Beverly's 49 nursing homes and four assisted living facilities in the state; 10 of those nursing homes and one ALF are in the Tampa Bay area.
Beverly, of Fort Smith, Ark., said this year that it wanted to sell its Florida operations because of high legal costs and liability insurance in the state. The company, which still will operate about 500 nursing homes in 29 states, said Florida accounted for 10 percent of its revenue of $2.6-billion last year.
The 49 nursing homes in Florida have about 6,129 licensed beds. Together with the four ALFs, Beverly's nursing homes in Florida generated $267-million in revenues last year.
No information was available about the buyer, which was described as an affiliate of Vantage Medical Inc. and Formation Capital LLC. None of those entities currently are licensed to operate nursing homes in Florida, according to the state Agency for Health Care Administration.
NMC reportedly is being financed through UBS Warburg and Heller Healthcare Finance. NMC expects to select operators for the Beverly facilities and file licensing applications with the state in early August. The sale is expected to be completed by year-end. Beverly said its local operators would work with the new owners to ensure a smooth transition for the residents.
"The sale of our Florida nursing home and assisted living operations is a critical element in our three-year strategic plan," Beverly chief executive and president William Floyd said. "This transaction strengthens our asset portfolio and should enable us to achieve better and more consistent financial results in the future."
Beverly, like all nursing home chains, was hard hit in recent years by a change in the Medicare reimbursement formula even as liability awards in patient care lawsuits continue to mount. The company also paid $175-million last year to settle a federal investigation into its billing of nursing costs.
Locally, Beverly was fined $425,000 in 1998 by the state for infractions at its Wellington Specialty Care and Rehab Center in Tampa, which has since closed. In 1993, a jury found in favor of a patient's family and ordered the company to pay $2.7-million for neglect at Eastbrooke Health Care Center in Brooksville.
Beverly has posted losses for each of the past three years. In the quarter ended March 31, it said special charges related to the sale of its Florida operations and work force reductions contributed to a net loss of $52.3-million, or 50 cents per share.
Beverly said it will use proceeds from the sale to pay off $50-million in long-term debt and $44-million in other debt related to its Florida operations.
The sale is expected to increase Beverly's earnings from operations by 9 cents to 12 cents per share in 2002. However, the company will post special charges of $6-million to $10-million in the second quarter and may incur other sales-related costs before year-end.
Beverly's shares closed Monday at $10.20, down 18 cents, but still well above its low a year ago of about $2.56.
_ Kris Hundley can be reached at hundleysptimes.com or On the block
Beverly Enterprises' facilities in the Tampa Bay area to be sold to NMC of Florida LLC include:
Beverly Health & Rehab Brandon
Beverly Health & Rehab Spring Hill, Brooksville
Beverly Healthcare Largo
Beverly Health and Rehab, Tampa
Countryside Healthcare Center, Palm Harbor
Edinborough Square, Dunedin (assisted living facility)
Spanish Gardens Nursing Home, Dunedin
Tampa Healthcare Center, Tampa
Tarpon Healthcare, Tarpon Springs
Whispering Pines Nursing Home, New Port Richey
Beverly Enterprises' Tarpon Springs facility is one of the properties to be included in the sale to NMC of Florida.