LOUISVILLE, Ky.—Kindred Healthcare, Inc. (the “Company” or “Kindred”) (NYSE:KND) has announced that it sold seven non-strategic nursing centers (the “Facilities”) for approximately $47 million to affiliates of Signature Healthcare, LLC (“Signature”). Each of the Facilities is located outside of Kindred’s 21 designated Integrated Care Markets.

The Company expects that the after-tax net proceeds from the Signature transaction, including transaction costs and tax benefits, will approximate $47 million. Over time, these proceeds will be reinvested in the Company’s Integrated Care Markets.

In the near term, Kindred intends to use the net proceeds to pay down the outstanding balance under its revolving credit facility. At March 31, 2013, the outstanding balance on the Company’s $750 million revolving credit facility approximated $350 million. The Company expects the Signature transaction will be slightly dilutive to earnings in 2013.

The Facilities contain 900 licensed nursing center beds. Five of the Facilities are owned and the remaining Facilities are leased. The Facilities generated revenues of approximately $63 million and earnings before interest, income taxes, depreciation and amortization of approximately $7 million (including the allocation of approximately $2 million of overhead costs) for the year ended December 31, 2012. The Facilities had aggregate rent expense of approximately $2 million for the year ended December 31, 2012.

The Company had previously announced its intention to sell eight facilities to Signature but the Company was unable to satisfy all closing conditions for the sale of one facility and elected to remove it from the transaction.

RBC Capital Markets served as the exclusive financial advisor to Kindred on the Signature transaction.

“We are pleased to complete this tax-efficient transaction, which further accelerates our repositioning strategy with the goal of improving our long-term growth, profitability and financial position,” said Paul J. Diaz, Kindred’s Chief Executive Officer. “We will continue to sharpen our focus on our Integrated Care Market strategy that enables us to better Continue the Care for our patients and provide high-quality clinical outcomes throughout an entire post-acute episode.”

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “will,” “intend,” “may” and other similar expressions, are forward-looking statements. 

About Kindred Healthcare

Kindred Healthcare, Inc., a top-125 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of $6 billion and approximately 76,000 employees in 46 states. At March 31, 2013, Kindred through its subsidiaries provided healthcare services in 2,169 locations, including 116 transitional care hospitals, six inpatient rehabilitation hospitals, 204 nursing centers, 24 sub-acute units, 101 Kindred at Home hospice, home health and non-medical home care locations, 103 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,615 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for five years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.