Skilled Healthcare Group Inc., a Foothill Ranch-based nursing home operator, has undergone a $420 million recapitalization from Boston-based Heritage Partners Inc.
Next could be a sale of the company.
Heritage hired Credit Suisse First Boston to help it explore “strategic alternatives” for Skilled that could include a sale or initial public offering, Mark Jrolf, a Heritage general partner, told The Deal, a venture capital news site earlier this month.
Skilled runs 71 nursing homes and other facilities, mainly in California and Texas.
Heritage first invested in Skilled back in 1997, when it was known as Fountain View Inc.
The company has about $413 million in yearly revenue and $64 million in earnings before interest, taxes, depreciation and amortization, Jrolf said.
Heritage has invested some $100 million overall into Skilled, he said.
Fountain View went into bankruptcy in 2001, after it failed to pay a $6.1 million settlement. A California jury ruled in 2001 that Fountain View was negligent in its care of a 65-year-old woman who died in 1998 after surgery to remove a blood clot. Fountain View eventually settled the case for $1.05 million.
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School spirit: Brenda, Michael Drake get a stuffed anteater, UCI’s mascot, at a recent campus ceremony |
The company emerged from bankruptcy in 2003 and changed its name to Skilled Healthcare Group. Heritage, which had owned half of Fountain View prior to its bankruptcy, ended up owning 80% of the reorganized Skilled.
Moody’s Investor Service is cautious about Skilled.
In a report, Moody’s said the company is leveraged at about 5.7 times debt to earnings before interest, taxes, depreciation and amortization, which limits its financial maneuverability.
The report also noted that Skilled’s facilities geographically are concentrated in the West, and that it is susceptible to Medicare and Medicaid changes, as well as future liability claims.
UCI’s Healthcare Power Couple
Michael Drake, an ophthalmologist who takes over as the University of California, Irvine’s chancellor this week, isn’t the only member of his family with a healthcare background.
Wife Brenda Drake is a lawyer with deep involvement in health issues. In March, she became the director of the Public Health Trust, an Oakland-based program that manages funds generated through lawsuits dealing with various public health issues.
She is a graduate of Stanford University and Boalt Hall, the University of California, Berkeley’s law school. She practiced corporate law for 16 years before becoming a foundation executive with the Richard and Rhonda Goldman Fund, where she spent 11 years.
Brenda Drake drew praise from James Mazzo, chief executive of Advanced Medical Optics Inc., the Santa Ana-based eye products maker, when he lunched with her and her husband shortly after Michael Drake’s appointment to UC Irvine’s top spot.
“I was equally impressed with Brenda, which I think is just great,” Mazzo said. “So it’s nice to see that both are going to be able to bring such notoriety and different perspectives to our community.”
Former UCI Chancellor Ralph Cicerone is set to leave to head the National Academy of Sciences in Washington, D.C., next week.
As for her job status, Brenda Drake will fulfill her commitment to the Public Health Trust and will commute between Orange County and Oakland through next spring, according to Susan Menning, UCI’s assistant vice chancellor for communications.
Brenda Drake is spending the summer up north because their two sons are home from college.
Training Board Gets $1M from Feds
The Orange County Workforce Investment Board has received $1 million from the Department of Labor to train youth and adult workers for careers in healthcare and biotechnology.
The Orange County Workforce Investment Board’s lined up several partners in the corporate and the academic world for the initiatives: Allergan Inc., Irvine; Beckman Coulter Inc., Fullerton; St. Joseph Health System, Orange; and the University of California, Irvine.
With partners, the board plans to standardize training and define medical technology career ladders. It also hopes to develop what are called “career lattices” for trainees to move into biotechnology and related jobs within healthcare.
A total of 225 people are set to be trained in the project, including entry-level workers and dislocated workers from within declining industries in OC.
Bits and Pieces:
PacifiCare Health Systems Inc., Cypress, said it’s narrowed its possible locations for an 850-job customer service and mail order prescription fulfillment center for its Costa Mesa-based Prescription Solutions unit to two cities, including Overland Park, Kan., a Kansas City suburb. PacifiCare said that a decision would be expected soon, and that the company is planning to invest as much as $35 million to furnish and equip the center AMDL Inc., Tustin, said the Food and Drug Administration has requested additional data on its DR-70 colorectal cancer test. Earlier this month, regulators said that DR-70 wasn’t equivalent to other tests already on the market, denying it a quick approval.
