The Ensign Group Announces Nine-Facility Expansion Into Iowa and Nebraska

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Jul 20, 2011, 05:00 ET

SIOUX CITY, Iowa, July 20, 2011 /PRNewswire/ -- The Ensign Group, Inc. (NASDAQ: ENSG) announced today that Ensign operating subsidiaries have acquired nine skilled nursing and assisted living facilities from Sioux City, Iowa-based Careage Management, LLC. The asset acquisition was effective on Monday, July 18, 2011, and includes:

Colonial Manor of Randolph, a 45-bed skilled nursing facility and 9-unit assisted living located at 811 South Main Street, Randolph, Nebraska;
Beatrice Manor, an 87-bed skilled nursing facility located at 1800 Irving Street Beatrice, Nebraska;
Careage Estates of Falls City, a 63-bed skilled nursing facility located at 1720 Burton Drive, Falls City, Nebraska;
Careage of Wayne, a 60-bed skilled nursing facility and 32-unit assisted living located at 811 East 14th Street, Wayne, Nebraska;
Careage Hills, a 44-bed skilled nursing facility located at 725 N. Second Street, Cherokee, Iowa;
West Bend Care Center and Prairie Creek Assisted Living, a 45-bed skilled nursing facility and 16-unit assisted living located at 203 4th Street NW, West Bend, Iowa;
Hillcrest Health Care Center and Mica Hill Estates, a 64-bed skilled nursing facility and 15-unit assisted living located at 2121 Avenue L, Hawarden, Iowa;
Careage of Clarion, a 76-bed skilled nursing facility located at 110 13th Avenue, Clarion, Iowa; and
Careage of Fort Dodge, a 65-bed skilled nursing facility located at 728 14th Avenue N., Fort Dodge, Iowa.

The transaction also included Careage Home Care, a small home health agency based in Cherokee, Iowa.

"We are excited to join the Iowa and Nebraska healthcare communities, and look forward to being strong contributors to the states' respective healthcare systems," said Mike Clegg, President of Gateway Healthcare, Inc., the Ensign subsidiary responsible for the facilities. He added that the former operator, Sioux City-based Careage Management LLC, "has done an incredible job of creating a caring, competent and patient-centered environment" in the facilities, and that Gateway and Ensign are hoping to enhance and build upon what he called "the outstanding foundation of quality care already extant in these homes."

Dan Myers, Careage President and CEO, confirmed that Careage contemplated offers from various suitors before settling on The Ensign Group. "Having had the opportunity to tour several Ensign facilities and visit with their staff and residents, we determined that Ensign best shares our philosophy of resident-centered care and providing a loving, dignified, home-like environment within the communities we serve," said Myers. Both Mr. Myers and Ann Myers, Careage's director of nursing and quality assurance, have joined Gateway and will remain on board for an indefinite period to ensure a smooth transition.

"We expect the former Careage facilities to pave the way for additional disciplined growth in Nebraska, Iowa and the Midwest," said Christopher Christensen, Ensign's President and Chief Executive Officer. He noted that Ensign typically seeks well-performing multi-facility "platforms" when entering new markets. He also said that the larger portfolio acquisition should not be viewed as marking a change from the company's traditional affinity for single acquisitions and smaller two-to-four building portfolios, which it will still pursue.

Mr. Christensen further reported that the nine facilities enjoy a relatively high percentage of private-pay census, and rely less on state Medicaid programs for revenues than most Ensign acquisitions have done historically. Finally, he reconfirmed that Ensign expects the portfolio, which had an occupancy rate at transfer of approximately 74%, to be operationally accretive to earnings in 2011. Ensign purchased the portfolio with cash.

Mr. Christensen reaffirmed that Ensign is actively seeking additional opportunities to acquire both well-performing and struggling long-term care operations across the United States. The acquisition brings Ensign's growing portfolio to 96 healthcare facilities, three hospice companies and three home health businesses in 10 states.

About Ensign ™

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, and other rehabilitative and healthcare services for both long-term residents and short-stay rehabilitation patients at 96 facilities, three hospice companies and three home health businesses in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa and Nebraska. More information about Ensign is available at http://www.ensigngroup.net.