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Glenview Capital starts a new position in Brookdale Senior Living

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Sep. 9 2014, Updated 1:00 p.m. ET

Glenview Capital and Brookdale Senior Living

Larry Robbins’ Glenview Capital bought new positions in National Oilwell Varco (NOV), Cadence Design Systems (CDNS), and Brookdale Senior Living (BKD). The fund raised positions in VCA Inc. (WOOF) and Flextronics International (FLEX).

Glenview Capital  disclosed a new position in Brookdale Senior Living (BKD) that accounts for 0.77% of the fund’s 2Q14 portfolio.

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Brookdale Senior Living Inc. is a leading owner and operator of senior living communities throughout the United States. It owns, leases, and operates retirement centers, assisted living and dementia-care communities, and continuing care retirement centers (or CCRCs). Through Brookdale Ancillary Services, the company also offers a range of outpatient therapy, home health, and hospice services. It mainly offers these services to residents in its communities.

Brookdale has six reportable segments—retirement centers, assisted living, CCRCs rental, CCRCs entry fee, Brookdale Ancillary Services, and management services.

Brookdale and Emeritus merge

In February, Brookdale and Emeritus Corporation (or ESC) signed a definitive merger agreement to create the first national senior living solutions company. The merger was completed in July. It transformed Brookdale into the only national full-spectrum senior living solutions company. It has over 1,100 communities in 46 states. It covers 80% of the U.S. population.

Brookdale and HCP create a strategic joint venture

In April, Brookdale and HCP created a strategic joint venture to own and operate entry fee CCRCs. The joint venture will own 14 CCRC campuses valued at $1.2 billion. Brookdale will continue to manage these communities.

Reports revenue and CFFO increase in 2Q14

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Total revenue for the second quarter was $748.4 million—an increase of 4.5% from 2Q13. Cash From Facility Operations (or CFFO) per share increased by 16.4% to $0.71 per share—compared to 2Q13. This was excluding integration, transaction-related, and electronic medical records (or EMR) roll-out costs in both periods. Brookdale said that despite a slight decline in occupancy, its strong growth and CFFO performance in the second quarter were driven by its solid market position, disciplined pricing, and cost control.

Under segments, the senior housing revenue growth reflected a 3.3% increase in rate over 2Q13. It also reflected the addition of ~700 units since the second quarter last year. The additions were through organic growth and acquisition. Four segments—Retirement Centers, Assisted Living, CCRCs rental, and CCRCs entry fee—make up the company’s consolidated senior housing portfolio. The Brookdale Ancillary Services segment’s revenue increase was mainly driven by a volume increase in home health and hospice.

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