The Ensign Group, Inc. (ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, home health care, hospice care and senior living companies, announced today a plan to separate its home health and hospice agencies and substantially all of its senior living businesses into a separate publicly-traded company. Upon consummation of the spin-off, the two companies will include:
- The Ensign Group, Inc., which will include transitional and skilled services, rehabilitative care services, healthcare campuses, post-acute-related new business ventures and real estate investments; and
- The Pennant Group, Inc., which will include Ensign’s home health and hospice operations, substantially all of Ensign’s senior living operations, and Ensign’s mobile diagnostic and clinical laboratory operations.
Ensign plans to effect the strategic separation through a spin-off in which it will distribute shares of Pennant’s common stock to Ensign’s shareholders on a pro rata basis. At the time of the spin-off, it is anticipated that Pennant, which is currently a wholly-owned subsidiary of Ensign, will consist of 60 home health and hospice agencies, 51 senior living operations, and mobile diagnostics and lab operations located across 13 states. Pennant anticipates 23 of the senior living assets will remain subject to leases with third-party landlords. In addition, Pennant will operate 28 senior living communities pursuant to a new, long-term triple-net leases with Ensign subsidiaries.
The spin-off is expected to be tax-free to Ensign’s shareholders, except for any cash paid in lieu of fractional shares. Pennant has applied to list its shares on the NASDAQ stock market under the ticker symbol “PNTG.”
Ensign’s current management team will continue in place. Mr. Daniel H Walker, President of Ensign’s home health and hospice holding company, Cornerstone Healthcare, Inc., will become the Chairman, Chief Executive Officer and President of Pennant. Ensign’s current President and Chief Executive Officer, Mr. Christopher R. Christensen, will also serve as a director for both companies for the foreseeable future. In addition, Mr. John Nackel, a current Ensign director, will also serve as a Pennant director, and it is anticipated that he will temporarily continue his service on the Ensign board until his replacement is found or the end of his current term, whichever occurs first.
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