Beverly sells Florida nursing homes

Beverly Enterprises, Inc. recently announced the signing of a definitive agreement for the sale of 49 skilled nursing facilities and four assisted living centers in Florida to NMC of Florida, LLC for $165 million in cash. NMC of Florida is an affiliate of Vantage Medical, Inc. and Formation Capital LLC. The purchaser has agreed to terms for senior debt financing with UBS Warburg and Heller Healthcare Finance, subject to the completion of lender due diligence and required approvals.

The purchaser will finalize selection of operators for these facilities, and necessary licensure applications will be filed with the State of Florida in early August. The sale, which is subject to customary regulatory approvals, is expected to be completed in the fourth quarter of 2001. Beverly's local subsidiaries will work with the purchaser and operators to ensure a smooth transition in the management of the facilities and in the continuing provision of quality care to the residents.

Beverly will use the proceeds from the sale to pay-off approximately $50 million of long-term debt obligations and $44 million of off-balance-sheet financing arrangements relating to its Florida operations. The remainder may be used to reduce other secured long-term debt or for other corporate purposes. The transaction is expected to increase Beverly's earnings from operations by approximately nine to twelve cents per share diluted in 2002. Beverly is expected to record special charges against second quarter earnings totaling $6-10 million, primarily for additional asset impairments in Florida. Other special charges may occur during the third and fourth quarters, as a result of closing and related costs.

"The sale of our Florida nursing home and assisted living operations is a critical element in our three-year strategic plan," said William R. Floyd, Beverly's Chief Executive Officer and President. "This transaction strengthens our asset portfolio, and should enable us to achieve better and more consistent financial results in the future."

Floyd continued: "Our frontline caregivers in Florida have demonstrated an admirable level of commitment and personal dedication to their patients during a very difficult period. We first announced our intention to sell these operations early this year. Since then, the staff and management team have maintained a sharp focus on delivering quality care, despite potential distractions from the sale process. We appreciate their continuing commitment to a noble calling. Beverly's local operators will work with the new owners to ensure a smooth transition in the management of these facilities and in the continuing provision of quality care to the residents."

The 49 skilled nursing facilities (including six leasehold interests) included in this sale have a total of approximately 6,129 licensed beds. These facilities and the four assisted living centers generated $267 million in revenues during 2000. Beverly intends to sell one remaining skilled nursing facility in Florida in a separate and non-material transaction that is expected to close in the third quarter.

Beverly Enterprises and its operating subsidiaries comprise a leading provider of healthcare services to the elderly in the United States. They currently operate 526 skilled nursing facilities, as well as 34 assisted living centers (including the Florida operations), 56 home care and hospice agencies and 161 outpatient therapy clinics. Through AEGIS Therapies, they also offer rehabilitative services on a contract basis to nursing homes operated by other care providers.

Source: Beverly Enterprises

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