Houlihan Lokey Advises FC Encore

Houlihan Lokey is pleased to announce that FC Encore, LP, a 60-facility multistate portfolio, has been acquired by Omega Healthcare Investors, Inc. (Omega) for $735 million. The transaction closed on October 31, 2019.

The 60 facilities, consisting of 58 skilled nursing facilities (SNFs) and two assisted living facilities (ALFs)—representing 6,590 operating beds—are located in Florida, North Carolina, Mississippi, Louisiana, Idaho, Kentucky, Missouri, and Montana. These facilities are leased to two operators within three triple-net leases providing for approximately $64 million in 2020 annual contractual cash rent. Consideration consisted of approximately $346 million of cash and the assumption of approximately $389 million in mortgage loans guaranteed by the U.S. Department of Housing and Urban Development. These loans have a blended "all-in rate" (interest rates and mortgage insurance premiums) of 3.66% per annum with maturities between September 2046 and December 2051.

Omega Healthcare Investors (NYSE:OHI) is a triple-net, equity real estate investment trust (REIT) that supports the goals of SNF and ALF operators with financing and capital. Omega partners with more than 65 of the most future-focused, growth-oriented operators in the U.S. and U.K., accelerating its growth strategies with a $1.25 billion unsecured credit facility and proven access to the largest public equity and debt markets in the world.

This transaction represents Houlihan Lokey's continued leadership and momentum in the healthcare post-acute services sector. Houlihan Lokey's Healthcare Group is among the largest dedicated healthcare investment banking groups in the country. In 2018, the group closed 36 transactions and was ranked the No. 1 M&A advisor for all U.S. healthcare transactions by Thomson Reuters. Houlihan Lokey's Healthcare Group has closed more than 300 M&A healthcare transactions since inception.

Houlihan Lokey served as the exclusive financial advisor to FC Encore and assisted in initiating, structuring, and negotiating the transaction on its behalf.