Irvine-based Griffin-American Healthcare REIT III Inc. has completed its $1.1 billion buy of privately held Trilogy Health Investors LLC in Louisville, Ky.
Griffin-American is primarily an owner of various types of healthcare real estate. It did the Trilogy deal through a joint venture with Greenwood Village, Colo.-based NorthStar Healthcare Income Inc., another public but nontraded real estate investment trust.
The acquisition of Trilogy, which does business as Trilogy Health Services LLC, is Griffin-American’s first foray into the senior healthcare operating world.
The Trilogy deal “highlights the value of the strategic partnership between the Griffin-American and NorthStar Healthcare platforms, which worked together in a synergistic fashion for the benefit of both groups of stockholders,” Griffin-American Chief Executive Jeff Hanson said in a news release.
Trilogy has 97 properties with more than 10,000 beds. The company operates in Ohio, Kentucky, Indiana and Michigan. The properties offer several types of senior care, including assisted-living, independent living, skilled nursing, and memory care services.
Hanson told the Business Journal in September that having Trilogy in the Griffin-American portfolio offers “embedded potential growth.” He mentioned that Griffin-American would have the chance in the future to buy 20 properties that Trilogy leases from third parties, plus plans to develop new Trilogy senior care campuses.
Trilogy “has been at the forefront of a changing healthcare delivery landscape in this country and its model is an example that other companies in this industry will come to emulate,” Danny Prosky, Griffin-American’s president and chief operating officer, said in the news release.
Quality Systems Changes
Rusty Frantz, chief executive of Irvine-based Quality Systems Inc., spent time at an investor conference hosted by Minneapolis-based Piper Jaffray this month in New York discussing what was characterized as “shaking things up.”
Quality, which makes software that doctors and dentists use to manage their practices, has made several changes since Frantz succeeded Steven Plochocki in July. The changes include the sale of its hospital software business, as well as the recent appointment of veteran healthcare entrepreneur and executive Jeffrey Margolis to succeed company founder Sheldon Razin as chairman, and looking for more executives. Razin remains chairman emeritus.
“You done yet?” asked Sean Wieland, a Piper Jaffray analyst who hosted Frantz’ talk.
“No. We’ve actually got to deliver the results,” Frantz replied.
Wieland, using a house-themed analogy, asked Frantz what Quality would look like “when the remodel is done.”
He said, “When you take a house down to the studs, you make sure you’ve got a sound foundation to rebuild the house.”
Quality’s foundation is based on a significant portion of its current revenue, as well as its “client footprint,” according to Frantz.
He noted that his group has focused on client satisfaction and experience since they’ve come in.
“That is something that enables us to start” the reconstruction, he said.
Teva Sheds Assets
Teva Pharmaceutical Industries Ltd., an Israeli generic drugmaker that has said it’s selling its Irvine plant, now is gearing up to sell another $1 billion in assets in order to complete its buy of Dublin, Ireland-based Allergan PLC’s generic business, according to a Reuters report.
Teva has a deal that was announced in July to buy Actavis Generics for $40.5 billion in cash and stock.
The Israeli company’s asset divestiture is tied to the recent mega deal between New York-based Pfizer Inc. and Allergan—which operates from Parsippany, N.J., and has its aesthetics/dermatology and eye care hub in Irvine. The $160 billion deal is contingent upon Allergan completing the generic sale to Teva.
Antitrust issues have cropped up in the Allergan and Teva deal because of overlap in the companies’ drug portfolios.
Allergan was subpoenaed by the Justice Department’s antitrust division last summer, before the Teva deal was announced, regarding how it prices generic drugs.
Bits & Pieces
Several Orange County hospitals, including Hoag Memorial Hospital Presbyterian, UC Irvine Medical Center, and Children’s Hospital of Orange County, were recognized by the San Francisco-based Leapfrog Group in its 2015 Top Hospitals list. Leapfrog, a nonprofit group that serves large healthcare purchasers, recognized 98 hospitals nationwide on safety and quality standards. … Separately, Hoag said it was recognized by trade publication Becker’s Hospital Review as one of 100 hospitals and health systems with “great neurosurgery and spine programs.” … Hoag Orthopedic Institute, an Irvine specialty hospital, marked its fifth anniversary. The facility has been recognized for its care delivery, including being the subject of a Harvard Business School study.
