Brookdale to Sell Majority Hospice, Home Health Stake to HCA Healthcare in $400 Million Deal

Brookdale Senior Living Inc. (NYSE: BKD) has agreed to sell a majority stake in its hospice, home health and outpatient therapy business to HCA Healthcare (NYSE: HCA). Brookdale will sell 80% of the equity in its health services segment to HCA for a purchase price of $400 million.

Brookdale in December indicated that it would consider a sale or spin off of its health care services segment, after taking a series of financial punches from the coronavirus pandemic. Brookdale will retain a 20% equity interest in the venture with HCA Healthcare.

“The health and wellbeing of our residents is at the core of Brookdale’s mission,” Lucinda Baier, Brookdale’s president and CEO, said. “Today’s partnership with HCA Healthcare, a leading health care organization, will continue the high quality services delivered to our residents and patients, strengthen our liquidity position and provide meaningful opportunities for growth through better integration of services across the entire care continuum.”

With seniors particularly vulnerable to COVID-19, the pandemic has rocked the senior housing and assisted living industries with many facilities seeing outbreaks or reduced resident volume. All told, the pandemic cost Brookdale $71 million in the third quarter of 2020, even as the company contended with wildfires and hurricanes in some of its markets. The company expects to post fourth quarter earnings on Thursday.

While Brookdale’s patients do not have to reside in one of their facilities to receive care, those residents do represent the bulk of the company’s hospice patient population.

Brookdale is not alone among providers that are re-evaluating their health care businesses. Late last year, home health and hospice provider Encompass Health (NYSE: EHC) announced that it also was considering a spin off or sale for its hospice and home health operations.

Nashville-based HCA Healthcare operates 185 hospitals, surgery centers, freestanding emergency rooms, urgent care centers, and physician clinics in 20 states and the United Kingdom.

“HCA Healthcare’s objective is to be the health care system of choice in the communities we serve through the development of comprehensive services and by delivering high quality, convenient care to our patients,” said Sam Hazen, HCA Healthcare’s CEO. “We believe this opportunity to partner with Brookdale will expand the services we offer and enhance our ability to deliver a better experience for our patients as well as for Brookdale residents.”