PACS Group Announces Pending Acquisition of Operations at 53 Pacific Northwest Properties, Real Estate Joint Venture at Most Locations

FARMINGTON, Utah, May 23, 2024–(BUSINESS WIRE)–PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”) today announced that the Company’s subsidiaries have agreed to acquire the operations of 53 skilled nursing and assisted living/independent care facilities in 8 Western states. Currently, the facilities are managed by Prestige, a family company whose tradition of caring for seniors dates back to the 1940s.

Operations are located in 8 states, including Oregon (21 facilities), Washington (19 facilities), Idaho (6 facilities), Nevada (3 facilities) and one facility each in Alaska, Arizona, California and Montana. In total, the facilities include 2,511 specialist care beds and 1,334 assisted living and independent living units. The company will lease 37 facilities from a joint venture in which it holds 25% of shares. The remaining 16 facilities will be rented from non-affiliated external landlords.

“We are excited to welcome the 53 Prestige properties, as well as their staff and residents, to the PACS family,” said Jason Murray, president and CEO of PACS. “The Delamarter family and the Prestige team have built a wonderful legacy of providing compassionate care over the last many decades, and we look forward to honoring that legacy and supporting the facilities in their mission to provide high-quality care into the future.”

Josh Jergensen, president and chief operating officer of PACS, added: “We are excited to partner with these great Prestige properties as well as PACS entering 5 new states. We plan to leverage our decentralized leadership model, as well as our prior experience with larger portfolio acquisitions, to quickly integrate new facilities following the anticipated closure later this year. We look forward to serving these facilities and their communities.”

Derick Apt, PACS CFO, noted: “The acquisition of Prestige illustrates an important element of our growth model in action. We consider acquisitions, both large and small, if we believe the PACS operating model can thrive in local markets. We look forward to seeing the good these facilities can bring to their communities in the years to come. And because we will be leasing the facilities on a traditional triple net basis, our initial capital outlay to complete the transaction will primarily consist of approximately $15 million. that we will invest in a real estate joint venture with our 25% stake.”

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The acquisition of the business is subject to customary closing conditions, including, without limitation, the receipt of applicable regulatory and third-party approvals, and there can be no assurance that the transactions will be completed on the expected date or that they will be completed at all. The company expects that the transactions will be finalized in the third quarter of 2024.

Forward-looking statements

Statements contained in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties. Forward-looking statements contained in this press release can be identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “would”, “could”, “intend”. ”, “goal”, “project”, “consider”, “believe”, “estimate”, “anticipate”, “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements include, but are not limited to, the anticipated closing of the Prestige acquisition, the potential strategic benefits of the Prestige acquisition, and are based on PACS’ current expectations, forecasts and assumptions, are subject to inherent uncertainties, risks and assumptions that are difficult to predict, and actual results and performance may vary materially due to a number of factors, including: if we are unable to complete the acquisition of Prestige; if we are unable to integrate the business and operation of the Prestige facilities within the expected time frame or at all; and if we continue to incur significant expenses related to the Prestige acquisition and the related integration of the Prestige facilities, if completed. Other risks and uncertainties include those described more fully in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024 and in other PACS reports filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this announcement are based on information available to PACS as of the date hereof and are made only as of the date of this announcement. PACS has no obligation to update such information except as required by applicable law. These forward-looking statements should not be relied upon to reflect the views of PACS as of any date subsequent to the date of this press release. In light of the foregoing, investors are encouraged not to rely on any forward-looking statements in drawing conclusions or making any investment decisions regarding any PACS securities.

About PACS™

PACS Group, Inc. is a holding company that invests in post-acute care facilities, specialists and ancillary services. Founded in 2013, PACS Group is one of the largest post-operative disease treatment platforms in the United States. Its independent subsidiaries operate more than 200 post-acute care facilities in nine states, serving more than 22,000 patients daily. References herein to the consolidated “Company” and the use of the terms “we”, “us”, “our”, “its” and similar expressions refer to PACS Group, Inc. and its consolidated subsidiaries, taken as a whole. PACS Group, Inc. and its subsidiaries, which are not licensed health care providers, do not provide health care services to patients, residents or any other person, and do not direct or control the provision of the services provided or the activities of the subsidiaries of these health care providers. All health care services are provided exclusively by their respective subsidiaries that are licensed health care providers, under the direction and control of licensed health care professionals in accordance with applicable law. More information about PACS can be found at https://IR.pacs.com. The information contained on our website does not form part of this press release.

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