The Ensign Group Inc. ENSG is on an acquisition spree. Just a day after acquiring The Orchard Post-Acute Care Center in Whittier, CA, the company announced the takeover of 10 skilled nursing facilities and assisted living operations in Arizona. The company expects these facilities to prove slightly accretive to earnings in 2015.
The acquisitions will boost The Ensign Group’s staff strength, which will help it to provide quality care. The takeovers will also add approximately 1514 beds to the company’s collective capacity of around 15,500 operational skilled nursing, assisted living and independent living beds.
Apart from taking over these facilities, The Ensign Group – through one of its subsidiaries – bought Olympia Transitional Care and Rehabilitation which is a 125-bed skilled nursing facility in Washington.
Acquisitions have been a key growth catalyst for The Ensign Group for years. Over the last two years, the company has taken over 29 facilities across eight states. Transitional, skilled and assisted living revenues generated by these facilities increased by approximately $57.5 million to almost $90 million in 2014.
In the first quarter of 2015, the company acquired nine skilled nursing operations, five assisted and independent living operations, one home health business, one home care business and two urgent care businesses.
In April, The Ensign Group acquired the underlying real estate of Panorama Gardens Nursing and Rehabilitation Center – a 149-bed skilled nursing facility in Panorama City, CA. The company also acquired Coral Desert Rehabilitation and Care – a 60-bed all-private/Medicare skilled nursing facility in St. George, Utah.
In June this year, The Ensign Group’s subsidiary Cornerstone Healthcare purchased California-based Managed Care at Home, which is a Medicare and Medi-Cal certified home health agency that serves the San Jose area.
As a result of these frequent acquisitions, the company now operates 161 health care facilities, 26 of which are owned, 13 hospice agencies, 14 home health agencies, three home care businesses and 17 urgent care clinics across 12 states.
We believe that the company will continue to pursue acquisitions that will expand its customer base and market share going forward.
Stocks to Consider
Currently, The Ensign Group sports a Zacks Rank #1 (Strong Buy).
Other favorably ranked stocks include Acadia Healthcare ACHC, China Biologic CBPO and Cambrex Corp CBM. All the three stocks carry the same Zacks Rank as The Ensign Group.
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