MISSION VIEJO, Calif., Nov. 15, 2022 /PRNewswire/ -- North American Health Services (NAHS) has entered into an agreement to transfer 24 of its 36 skilled nursing facilities in California and Washington to different operators and refocus its footprint on its resulting base of 12 California facilities. NAHS anticipates leveraging and expanding on this base to re-establish itself as a leading provider of high-quality skilled nursing services.
The facilities that NAHS agreed to transfer were burdened by a master lease agreement with SABRA that the company concluded were untenable and, after efforts to renegotiate the economic terms failed to materialize in an agreement, SABRA provided notice of termination and requested that NAHS cooperate in a coordinated transfer of the affected facilities. In an effort to ensure a smooth transition of patient care and maximize employee retention, NAHS has agreed to such a transfer. "Our team worked diligently, in good faith, and consistently to reach a resolution with Sabra which would have enabled us to retain our full 36 facilities. Ultimately, we had no option other than transferring our operations in these 24 SABRA-owned facilities," said North American CEO Michael Moore. "Losing 24 facilities and the more than 3,000 loyal employees and ESOP members is heartbreaking, but the lease terms at these facilities had become uneconomic given the continuously slow recovery of the skilled nursing market," Moore stated. "We believe our scaled down Company will be more viable without the SABRA lease terms. We look forward to continuing to invest in our ESOP in ways that will drive value back into the business and provide us the flexibility to pursue strategic growth opportunities.
NAHS will transfer 20 facilities in California to the Ensign Group and four facilities in Washington to Avamere. The anticipated date for transition is January 31, 2023. Both new operators have indicated their intent to offer employment to virtually all current NAHS employees.
In addition to recovering from the impacts of the pandemic, NAHS, like other skilled nursing operators, has endured significant operational strains from labor and supply shortages, exponentially increased costs for goods and services from vendors and suppliers, and a reimbursement landscape that has failed to keep pace with these rising costs. The devastating impacts of COVID-19 on the Skilled and Long-Term Care industries are well documented and NAHS was not immune to this once-in-a-lifetime phenomenon.
"With 12 facilities remaining, NAHS will need to retain as much of their talent as possible in order to continue providing best-in-class service at their remaining facilities while being able to support our anticipated future growth."
NAHS operates 36 skilled nursing facilities in California and Washington.
CONTACT:
Andy Boian, CEO - dovetail solutions
415.404.2539
[email protected]
SOURCE North American Health Services
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