San Clemente-based CareTrust REIT Inc. is keeping itself busy as February unfolds by reworking its credit, paying off debt and making deals.
The company owns nursing homes and was created in 2014 after Mission Viejo-based Ensign Group Inc. spun off its real estate holdings.
It said it expanded its borrowing capacity under its unsecured revolving credit line from $300 million to $400 million and that the line carries an expanded accordion feature that could allow CareTrust to borrow an additional $250 million.
It simultaneously entered into a new $100 million, seven-year, nonamortizing unsecured term loan and used $95 million of the loan’s proceeds to pay off and terminate its existing secured mortgage indebtedness under a 2006 credit agreement with Norwalk, Conn.-based General Electric Capital Corp. The General Electric Capital agreement was “legacy debt” carried over in the spin-off, according to the REIT.
CareTrust said it will save about $1.6 million this year through paying off the legacy debt and through lower interest expenses from the refinancing.
Chief Executive Greg Stapley said the expanded credit line “allows us to focus on our current acquisition pipeline without the necessity of accessing the equity markets in the near term.”
Separately, CareTrust recently paid about $32.7 million for nine Iowa nursing homes with 518 operating beds. The properties are in Iowa City, Sioux City, Osage, Denison, Dayton, Hull, Lenox, Grundy and Shenandoah.
The company said in a news release that it’s leasing the nursing homes to Bradenton, Fla.-based Trillium Healthcare Group LLC, which operates 29 nursing homes and senior living communities in the Southeast and Midwest.
Bending ‘Cost Curve’
Fountain Valley-based MemorialCare Health System is looking at “bending the cost curve” in an effort to serve employers in its operating communities, according to Chief Executive Barry Arbuckle.
It operates a variety of healthcare institutions in Orange County and parts of Los Angeles County, including Orange Coast Memorial Medical Center in Fountain Valley and Saddleback Memorial Medical Center, which has campuses in Laguna Hills and San Clemente.
“One goal is to pursue direct-to-employer customized contracts, partnering with employers, health benefits experts and health plans that will provide administrative services,” Arbuckle said.
MemorialCare is planning to accept responsibility and “some financial risk for an employer’s healthcare cost trend and quality expectations,” Arbuckle said, adding that the health system’s success would depend on how well it delivers on quality and price competition.
The executive also said he believes that area employers could benefit from existing MemorialCare partnerships with health insurers, such as Indianapolis-based Anthem Inc. and Hartford, Conn.-based Aetna Inc. Those partnerships are Vivity, which is an HMO collaboration between Anthem, MemorialCare and six other Southern California health systems, and Aetna Whole Health-Memorial Care, an accountable care network.
Nemus Gets New Deal
Costa Mesa-based Nemus Bioscience Inc. has signed a deal with Albany, N.Y.-based Albany Molecular Research Inc. to make active pharmaceutical ingredients.
Nemus uses cannabinoids, which are compounds that are active parts of marijuana, to develop various drugs.
Nemus said in a news release that the deal will involve Albany Molecular’s chemistry expertise in synthesizing and formulating Nemus’ prodrug of tetrahydrocannabinol. Prodrugs are ingredients that metabolize into active drugs once they enter the body.
The company’s prodrug forms the basis of NB1111, which is being developed to treat glaucoma, and NB1222, which is designed to manage chemotherapy-induced nausea and vomiting.
“Eye disease and the oncologic-related palliative care markets are in need of new classes of compounds to benefit patients,” said Dr. Brian Murphy, Nemus’ chief executive. “We are excited to collaborate with a highly experienced manufacturer like [Albany Molecular], to bring new medications such as cannabinoid-based therapeutics, to these areas of significant unmet medical need.”
Bits & Pieces
Irvine-based medical software maker Kareo Inc. hired Drew Hamilton as its chief sales officer, a new position. He was most recently executive vice president and general manager of Garden Grove software-as-a-service company TeleTrac. … Terry Belmont, who recently retired as chief executive officer of UC Irvine Health, the University of California-Irvine’s health enterprise, is a new director of Cellular Biomedicine Group Inc., which has offices in Shanghai and Cupertino and is engaged in developing stem cell therapies for degenerative diseases and immunotherapies for cancer. … Irvine-based ChromaDex Inc. said it signed a commercialization deal with Fort Lauderdale, Fla.-based BPI Sports LLC. The deal gives BPI rights to introduce dietary supplements that contain ChromaDex’s Niagen vitamin at various retail chains, including Minneapolis-based Target Corp. and Cincinnati-based Kroger Co.
