In a strategic move to build its presence in the Midwest, Beacon Health Management acquired 10 skilled nursing facilities in Iowa last month. Ryan Fleming of Institutional Property Advisors represented the seller in this $24.2 million, or $42,600 per bed, transaction. Todd Lindblom was the broker of record.
The targeted properties within the Pearl Valley Rehab & Healthcare portfolio include 568 beds and currently generate total revenue of $35 million and EBITDA of $3.5 million. That results in a 14.5% cap rate on the deal.
Occupancy across the portfolio fluctuated around 75 to 80% during the sale process. Some COVID cases towards the end of the transaction resulted in a delay in obtaining the debt and equity. But in the end, Avi Begun of Meridian Capital Group arranged $19.8 million in financing along with a $3.5 million AR line for the acquisition, albeit at slightly more conservative terms. And the two equity providers went ahead with the deal too. The seller is a private owner and operator based on the East Coast.
Beacon Health’s current operations include partnering with senior healthcare facility owners across the United States to provide a variety of healthcare services, such as temporary or permanent facility management, human resources/staffing, Medicare/Medicaid billing services and more. Now, they are establishing a significant presence in the Midwest.
