Irvine-based Sabra Health Care REIT Inc. is continuing to make deals as it approaches its first anniversary.
The owner of healthcare real estate recently bought two more nursing homes and an assisted-living facility: Honey Hill Care Center, a 150-bed nursing home in Norwalk, Conn.; and Manokin Manor Nursing and Rehab Center, a 135-bed nursing home in Princess Anne, Md.
Sabra acquired both through what’s called a “sale-leaseback” with affiliates of Millersville, Md.-based Aurora Health Management LLC.
Aurora will lease the properties back from Sabra and take over management of both.
Honey Hill and Manokin “are very good assets in good markets that have been undermanaged,” said Chief Executive Richard Matros, who led Sabra’s spin-off last year from Irvine nursing home operator Sun Healthcare Group Inc.
Matros said Aurora is “an operator skilled in turnarounds.”
Honey Hill and Manokin’s upside “is primarily in cost management and the recently announced (Medicare) cuts are not a material factor,” Matros said.
The Centers for Medicare & Medicaid Services have said that Medicare payments for nursing homes will go down by an average of about 11% between now and Sept. 30, 2012.
Sabra also said it will spend $4.2 million on a sale-leaseback deal for Creekside Senior Living, a 59-unit assisted-living building in Green Bay, Wis.
Sabra is making the buy from an affiliate of Des Plaines, Ill.-based Pathway Senior Living.
Pathway is buying the Creekside building through a court-appointed receiver, according to Sabra. Once Pathway buys it, it will close the sale-leaseback deal with Sabra.
Sabra said it expected to close the Creekside deal in the current quarter.
“Creekside Senior Living is a relatively new assisted-living facility that has also been undermanaged with significant potential upside under Pathway’s management,” Matros said.
Pathway will operate Creekside under a 10-year lease agreement.
Sabra also said ratings agency Standard & Poor’s raised its corporate credit rating on Sabra to B+, from B, with a stable outlook.
A rating of B indicates a company has the capability to meet its financial obligations.
Standard & Poor’s also raised its rating on Sabra’s senior unsecured notes to BB- from B.
S&P’s upgrades demonstrate Sabra’s “progress we have made in improving our credit statistics and diversifying our portfolio,” Matros said.
Matros said the upgrades, which will make it cheaper for Sabra to borrow money, “should allow us to better compete for acquisitions within diverse healthcare asset classes.”
Applied Wins Patent Suit
Applied Medical Resources Corp., a privately held medical device maker based in Rancho Santa Margarita, recently prevailed in a patent lawsuit filed against it by a pair of Covidien Ltd.’s operating units. Covidien is a medical device maker that has a tax-friendly headquarters in Ireland but operates out of Massachusetts.
Covidien units United States Surgical Corp. and Tyco Healthcare LP claimed that Applied infringed on four patents covering trocars, which are devices used in laparoscopic surgery. The units were seeking damages and an injunction to prevent Applied from selling much of its trocar line.
A few days prior to the trial, a U.S. District Court judge in Beaumont, Texas, declared two of the patents invalid. A jury then found that Applied didn’t infringe the other two patents before rendering both of them invalid.
The decisions clear Applied to continue to supply trocars to its customers, according to Irvine-based Knobbe Martens Olson & Bear LLP, which represented Applied.
Dental Website
The DentalXChange unit of Irvine software maker EDI Health Group Inc. recently launched a website called DentistUSA. It’s intended to connect patients with local dentists, and provide dentists with a series of coupons that they can customize for their practices.
The site also will provide an automated appointment system and allow patients to communicate with their dentist’s office and make payments via the website.
EDI President Scott Wellwood said the site’s goal is to help dentists attract more patients while assisting patients in securing dental care for lower costs.
DentalXChange provides software that allows dental offices to do things such as process insurance claims and check benefit eligibility. The company said that more than 12,000 offices use its products.
Bits and Pieces
Clarion Partners, a New York-based investment manager, has spent $21 million to buy Buena Vida at Town Center, a 115-unit complex in Rancho Santa Margarita. Clarion bought Buena Vida and two other senior housing communities from Carlsbad-based Kisco Senior Living. … James Corbett, chief executive of Aliso Viejo-based spinal device maker Vertos Medical Inc., won the “innovative medical device” award at the recent Adaptive Business Leaders Organization award presentation in Long Beach.
