Manor Care Inc., a large Silver Spring-based nursing-home chain, said yesterday it had agreed to sell 14 nursing homes, including two in suburban Maryland, to a Nashville company for $25 million.
Manor Care, which had indicated earlier that it planned to sell the properties, said it needed the money to help reduce the $90 million in debt it took on when it acquired Cenco Inc. earlier this year for $209 million. The Cenco acquisition made Manor Care the fourth-largest nursing-home operator in the nation.
Manor Care has been acquisitive of late. In addition to Cenco, it purchased Quality Inns International last year, and has said it wants to reduce its debt to allow further acquisitions.
Health Group Inc. of Nashville will pay Cenco $13 million in cash and assume $12 million in mortgage and lease obligations in return for the nursing homes, which are located in Adelphi, Hyattsville and the South and Midwest.
Manor Care said it hopes to close the deal this winter, and expects to realize a gain on the sale of $4.1 million before taxes and $2.9 million (42 cents a share) after taxes.
Shortly after acquiring Cenco--which increased Manor Care's bed space fourfold and gave it 105 nursing homes--the company said it planned to sell the 14 nursing homes as well as a number of Cenco divisions to raise money and reduce the debt. Manor Care officials estimated that the transactions would bring in about $40 million.
Of the nine Cenco operations Manor Care planned to dispose of--all unrelated to health care -- one is being liquidated, one has been sold, and the sale of five others is "in the works," a spokesman said yesterday.
In addition to its nursing-home interests, Manor Care operates hospitals and alcoholic rehabilitation centers.