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Collateral Examination & Quality of Earnings

Skilled Nursing Home Facilities Acquisition

An investor group was seeking to purchase six, multi-state, skilled nursing facilities. As part of the acquisition, the investor group was seeking a $26 million term loan to finance the acquisition and refinance existing indebtedness, and a $14 million revolving credit facility, to support a letter of credit facility and for working capital. The investor group engaged Durkin Group to perform due diligence on the skilled nursing facilities so that they could present the findings in a meaningful way to prospective lenders, some of whom had limited healthcare assets in their portfolios and limited healthcare expertise.

Our report included the skilled nursing facilities’ past financial performance benchmarked against other skilled nursing facilities, analysis by payor class, industry trends and commentary on a pending reimbursement rate change and its potential effect on the future financial performance of the company. We also performed background checks on all key employees who would be retained as part of the acquisition. A comprehensive report was compiled for the investor group that submitted the report to potential lenders to solicit proposals.

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