MISSION VIEJO, Calif., May 06, 2019 (GLOBE NEWSWIRE) — The Ensign Group, Inc. (Nasdaq: ENSG), the determine organisation of the Ensign™ group of professional nursing, rehabilitative care offerings, home fitness care, hospice care and senior living companies, introduced nowadays a plan to split its home health and hospice groups and extensively all of its senior dwelling corporations right into a separate publicly-traded company. Upon consummation of the spin-off, the 2 agencies will consist of:
— The Ensign Group, Inc., a good way to include transitional and professional services, rehabilitative care services, healthcare campuses, post-acute-associated new business ventures and actual estate investments; and — The Pennant Group, Inc., to be able to consist of Ensign’s domestic fitness and hospice operations, considerably all of Ensign’s senior living operations, and Ensign’s mobile diagnostic and clinical laboratory operations.
Ensign plans to effect the strategic separation via a spin-off in which it’ll distribute stocks of Pennant’s commonplace stock to Ensign’s shareholders on a pro rata basis. At the time of the spin-off, it’s miles expected that Pennant, which is currently a completely-owned subsidiary of Ensign, will encompass 60 domestic health and hospice businesses, fifty one senior dwelling operations, and cellular diagnostics and lab operations placed across thirteen states. Pennant anticipates 23 of the senior residing assets will continue to be situation to rentals with 0.33-birthday celebration landlords. In addition, Pennant will function 28 senior residing communities pursuant to a brand new, long-time period triple-net leases with Ensign subsidiaries.
The spin-off is anticipated to be tax-unfastened to Ensign’s shareholders, besides for any coins paid in lieu of fractional stocks. Pennant has applied to list its shares at the NASDAQ stock marketplace under the ticker symbol “PNTG.”
Ensign’s modern management team will continue in vicinity. Mr. Daniel H Walker, President of Ensign’s home fitness and hospice preserving organization, Cornerstone Healthcare, Inc., will become the Chairman, Chief Executive Officer and President of Pennant. Ensign’s present day President and Chief Executive Officer, Mr. Christopher R. Christensen, can even serve as a director for both groups for the foreseeable destiny. In addition, Mr. John Nackel, a present day Ensign director, will even serve as a Pennant director, and it’s miles expected that he will briefly hold his provider at the Ensign board until his alternative is discovered or the end of his current time period, whichever occurs first.
Discussing the prospects for the 2 corporations, Mr. Christensen said, “As we’ve got emphasised again and again over the past numerous quarters, our home fitness, hospice and senior residing leaders have created sizeable cost as they’ve embraced and implemented Ensign’s modern working version. As a end result of continuously achieving awesome medical results, Pennant has come to be the companion of preference inside the markets they serve, and it shows of their economic and scientific effects. We agree with that this spin-off, much like the very a hit spin-off of CareTrust REIT, Inc. In 2014, will shine mild on value that has yet to be completely realized beneath Ensign and will gift very attractive investments that provide our companions and shareholders the opportunity to share in that price, now and through the years.”
Mr. Christensen emphasized the guiding precept in pursuing this undertaking—just because it became in Ensign’s spin-off of CareTrust—has been to make sure two wholesome operations, both of that are poised to develop. He stated, “We have been very thrilled with the blended boom that Ensign and CareTrust have experienced and the go back that it has generated for our shareholders, which as of the recent zone cease, had together produced a 408% return because the spin-off date. While there are obvious differences inside the Pennant spin-off, we’re applying the classes discovered from the CareTrust spin-off, a few effective and a few bad, to create a shape that leaves each very healthy, financially and operationally, even as additionally ensuring that each corporation stays authentic to the operationally-driven way of life upon which they were based. Because of that, we are assured that both Ensign and Pennant can have a strong cultural and monetary basis to drive each near-term and lengthy-time period increase.”
Commenting at the rationale for the spin-off, Mr. Christensen stated, “We have constantly strived to be a management agency particularly else. Developing excellent, entrepreneurial leaders is our most crucial precedence. As we achieve this, growing a pathway for each of these leaders to revel in what such a lot of at Ensign have experienced, is a key approach to assist us attract and preserve the best and the brightest. Our new assignment software, which has been the incubator for these Pennant groups, has been, and will continue to be, a motive force for a whole lot of our success as an agency. The spin-off and the resulting new ownership shape allows us to higher align the interests of our shareholders with the leaders which might be using the increase of these corporations. It also presents a pathway for modern and destiny leaders to observe as we work to recreate the Ensign experience time and again once more for all our stakeholders.”
Further describing the motives in the back of the separation of these strains of business, Christensen stated, “Post-acute care is becoming more and more complex. We diagnosed early on in our new commercial enterprise venture enjoy that it changed into very crucial to invest inside the right humans and systems to give every of those unique operations the resources they require to be the great of the first-rate. To that end, every of the Pennant organizations has efficaciously advanced their own management and field-primarily based resources that perform unbiased of their skilled nursing counterparts. While the ones efforts have been running thoroughly, we consider that taking this extra step will accelerate each corporation’s capability, as two smaller however strong companies, to quickly adapt to the ever changing needs of our patients, payors and different vendors within the continuum of care.”
Mr. Christensen additionally emphasised that Ensign will continue to be the main consolidator in its notably fragmented core skilled nursing business, noting that Ensign will maintain all present owned real estate assets and will hold to pursue the acquisition of additional actual estate assets. “We now own 77 real estate assets, consisting of the brand new Service Center area and the 28 senior dwelling property so that it will be leased by way of Pennant following the spin-off, that’s drawing near the 94 belongings that we spun out to CareTrust in 2014. We will always be an operationally-driven agency first, however we are constantly comparing the growing underlying fee in our owned actual property and different new business ventures and the additional capability opportunities that each of these groups gives us in the destiny,” he stated.
Mr. Walker delivered, “Although Pennant will have a new ownership structure, we are very excited to announce that we anticipate to stay related to Ensign in meaningful and at the same time beneficial methods. To this end, Ensign and Pennant created a preferred company community, referred to as the Ensign-Pennant Care Continuum, on the way to memorialize the operational partnership we’ve got enjoyed beneath Ensign’s possession. As preferred carriers within the care continuum, each Ensign and Pennant operation that elects to opt into the network will paintings collectively to correctly percentage information and create care pathways so as to help us keep to drive care models focused on achieving the highest viable results in transitions between care settings. We are excited to similarly beautify our service services to our acute care companions, payors and different channel companions and look ahead to continuing to earn the trust of sufferers, residents and their households.”
Mr. Walker also suggested that Pennant will continue to pursue the acquisition of domestic health and hospice companies and senior living operations, as well as developing its mobile x-ray and lab corporations. Commenting on the brand new project pathway, Mr. Walker concluded, “Creating and growing these new organizations within Ensign has been an outstanding accelerator of our achievement and has solid a pathway for lots to benefit from the software of Ensign’s middle values. With this anticipated spin-off, we are recreating the opportunities that a number of the early Ensign founders skilled for a brand new era of leaders. We stay up for maintaining the consider of our new capital companions, our landlords, and our shareholders as we are trying to find to emerge as the most excellent domestic fitness, hospice and senior care company.”
Pennant has filed a registration declaration on Form 10 relating to the spin-off with the Securities and Exchange Commission. The spin-off is subject to standard conditions, inclusive of receipt of a tax opinion from suggest, effectiveness of the registration statement filed with the Securities and Exchange Commission, execution of inter-organization agreements and very last approval by means of Ensign’s board of directors. Ensign anticipates that the spin-off can be completed in or earlier than the fourth sector of 2019, but there can be no assurances regarding the very last phrases and shape of the spin-off or that it will likely be finished at all. In addition, Ensign management affirmed that Ensign does now not intend to “stand still” or in any other case bog down its acquisition software all through the pendency of the transaction, and references to the belongings counts, capitalization or financial circumstance of both Ensign or Pennant and similar statements may alternate as a result of acquisitions, expenses or different modifications made previous to the effective date of the spin-off.
BofA Merrill Lynch is serving as economic advisor to Ensign in connection with the spin-off. Kirkland & Ellis LLP is serving as prison marketing consultant to Ensign.
Ensign invitations investors to pay attention to a convention name with Ensign’s management on May 7, 2019, at 10:00 a.M. Pacific Time (1:00 p.M. Eastern Time), to discuss the proposed spin-off.
To listen to the webcast, or to view any financial or different statistical records required with the aid of SEC Regulation G, please go to the Investor Relations segment of the Ensign website at http://investor.Ensigngroup.Internet. The webcast might be recorded, and will be to be had for replay via the website till 5:00 p.M. Pacific Time on Friday, May 31, 2019.
The Ensign Group, Inc.’s independent running subsidiaries offer a large spectrum of skilled nursing and senior living services, bodily, occupational and speech treatment plans, home fitness and hospice offerings and different rehabilitative and healthcare offerings at 253 healthcare centers, 26 hospice organizations, 25 domestic health organizations and 9 domestic care corporations in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska, Oregon, Wisconsin, Kansas, South Carolina, Oklahoma, and Wyoming. More facts about Ensign is available at http://www.Ensigngroup.Internet.
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This press launch contains, and the associated conference name and webcast will encompass, ahead-searching statements which can be primarily based on management’s modern-day expectations, assumptions and beliefs approximately its commercial enterprise, economic performance, working effects, the enterprise wherein it operates and different destiny activities. Forward-looking statements can regularly be recognized with the aid of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “might also,” “will,” “should,” “might,” “ought to,” “capability,” “keep,” “ongoing,” comparable expressions, and versions or negatives of those phrases. These forward-searching statements consist of, however aren’t constrained to, statements regarding growth possibilities, destiny working and economic performance, and acquisition sports. They aren’t guarantees of destiny consequences and are situation to dangers, uncertainties and assumptions that could motive actual consequences to materially and adversely fluctuate from those expressed in any forward-looking announcement.
These risks and uncertainties relate to the organisation’s enterprise, its industry and its common stock and encompass: reduced prices and compensation costs for its services; its ability to acquire, increase, manipulate or improve operations, its capability to control its growing borrowing charges because it incurs extra indebtedness to fund the acquisition and development of operations; its capability to access capital on a price-powerful foundation to continue to successfully put in force its boom approach; its working margins and profitability may want to go through if it’s far not able to grow and manage efficiently its growing range of operations; competition from other companies in the purchase, development and operation of centers; its capacity to defend claims and complaints, inclusive of expert legal responsibility claims alleging that our services led to personal injury, and other regulatory-associated claims; the software of present or proposed government policies, or the adoption of recent laws and regulations, that could restrict its enterprise operations, require it to incur considerable expenditures or restriction its capability to relocate its operations if important; uncertainties that can put off or negatively effect the spin-off or reason the spin-off to now not arise in any respect; uncertainties associated with the publish-spin companies’ potential to comprehend the expected advantages of the spin-off; uncertainties related to Ensign’s capacity to effectively whole the spin off on a tax-unfastened basis inside the anticipated time frame or at all; unanticipated tendencies that put off or otherwise negatively have an effect on the spin-off; uncertainties related to Ensign’s capability to gain financing for the 2 businesses or the phrases of such financing; unanticipated tendencies related to the impact of the spin-off on our relationships with our sufferers, payors, employees and others with whom we’ve relationships; and unanticipated traits because of feasible disruption to our operations on account of the proposed spin-off, the potential impact of the spin-off and associated transactions on Ensign’s credit score. Readers need to not location undue reliance on any forward-looking statements and are endorsed to review the agency’s periodic filings with the Securities and Exchange Commission, which includes its Form 10-Q, for a greater whole dialogue of the dangers and different elements that might have an effect on Ensign’s commercial enterprise, prospects and any forward-looking statements. Except as required by using the federal securities laws, Ensign does now not undertake any duty to publicly update or revise any forward-searching statements, whether or not as a end result of new data, destiny occasions, converting instances or every other motive after the date of this press release.