Ventas exits Florida, then Kindred says buy, bye to senior health.

In a case of in-one-hand-out-the-other, long term care facility management firm Senior Health Management has purchased 18 nursing and assisted living centers in Florida from Kindred Healthcare Inc. for $65 million--shortly after Kindred acquired most of those centers in a close-out deal from Ventas Inc.

The deal nearly doubled Senior Health's presence in the Sunshine State, increasing the St. Petersburg firm's total number of Florida management contracts to 41. The company has 67 nursing centers nationwide.

Bart Karoleski, chief executive officer of Senior Health Management, said the opportunity to grow in one of the nation's biggest senior care markets was too good to pass up. "This is a tremendous opportunity for Senior Health Management and its affiliates," he said. "We're excited to bring these quality nursing centers under our ownership and to provide those residents with the quality care and services that our existing residents have come to expect."

The deal also ends Kindred's nursing home presence in Florida. The Louisville, Ky, provider of long term care services announced its decision to leave that state less than a week after agreeing to buy all 15 of Ventas' nursing facilities in Florida and Texas for $59.7 million.

Ventas, a healthcare real estate investment firm also based in Louisville, decided earlier this year to leave Florida and Texas because professional liability expenses for skilled nursing providers have escalated significantly in the past few years.

Kindred Healthcare, Ventas' primary tenant in both states, became a natural suitor, according to Ventas Chairman, CEO and President Debra Cafaro. "These agreements reflect a win-win outcome for Ventas and Kindred," she said, noting that the sale improved Kindred's earnings and Ventas' balance sheet.

As of Dec. 31, 2002, Kindred's health services division operated 285 nursing centers--totaling nearly 38,000 licensed beds--in 32 states. It also has a rehabilitation therapy business.

The company was formed from a spin-off of Ventas Inc.'s healthcare operations in May 1998. In September 1999, Kindred filed for protection under United States Bankruptcy Code and operated as a debtor-in-possession until it emerged from bankruptcy protection in April 2001.

Even after the spin-off, Kindred and Ventas remained close business partners. As of Dec. 31, 2002, Ventas' portfolio consisted of 44 hospitals, 220 nursing facilities and nine other healthcare and senior housing facilities in 37 states; 210 of the nursing facilities and all but one of the hospitals have been leased to Kindred or one of its subsidiaries.