[UPDATED] Brookdale Sells 20% Stake in Hospice, Home Health JV with HCA

For $27 million, HCA Healthcare (NYSE: HCA) has acquired Brookdale Senior Living’s (NYSE: BKD) 20% stake in a hospice, home health and therapy joint venture between the two companies.

HCA now owns 100% of the business. The joint venture formed in 2021 when the senior housing operator sold an 80% stake in its health care services segment to HCA, a large hospital operator, in a $400 million transaction.

Not long after, the JV sold off assets located outside of HCA’s service region to LHC Group for an undisclosed amount. LHC Group was later acquired by the UnitedHealth Group (NYSE: UNH) subsidiary Optum Health.

In tandem with the sale, Brookdale refinanced its remaining 2024 debt maturities.

“We believe the positive strides we have made in 2023 are reflected in these completed financing transactions, which clear our debt maturities until 2025,” said Dawn Kussow, Brookdale’s executive vice president and CFO, in a statement. “The ongoing proactive management of our liquidity position, including these completed and pending transactions, together with Brookdale’s solid improvement in operating results, support our continued strong liquidity position.”

With more than 670 communities nationwide, Brookdale Senior Living is the largest senior living operator in the United States. The company reported occupancy gains in Q3 2023 that yielded a 10% increase in resident-fee revenue year-over-year.

However, Brookdale reported a $48 million loss in net income during Q3, which is substantially greater than the $28 million loss it saw in the prior year’s period. The senior living provider attributed the loss to a $64.2 million decline in “other operating income,” which does not include resident-fee revenue.

An upswing in expenses related to debt, driven by interest rate increases, was also a contributing factor that likely spurred the sale and refinancing.

“We appreciate Fannie Mae and JLL for their ongoing partnership on this financing, and Capital One for their partnership on the amended credit agreement,” Kussow said.