Golden Living planning to sell three service companies, shed more nursing home operations

by Talk Business & Politics staff (staff2@talkbusiness.net) 7,290 views 

A day after Diversicare announced it would assume management of 22 Golden Living nursing homes in Mississippi and Alabama, Talk Business & Politics has learned that Golden Living is planning to sell its service companies Aegis, AseraCare, and 360 Staffing.

The company also is set to transfer its Missouri and Tennessee nursing home operations to another company or companies by Sept. 1. A source has told Talk Business & Politics that other nursing home transfers could soon happen in California and Indiana. The goal, according to several sources, is to scale back to operating only around one-third of the nursing homes Golden Living now owns or manages.

Aegis has operations at more than 1,400 locations in 42 states, and employs more than 8,400. The Golden Living company provides rehabilitation services primarily to patients in nursing homes and assisted living facilities. LinkedIn accounts for 360 Staffing and AseraCare indicate the companies employ 201-500 and 1,001-5,000, respectively. Overall, Golden Living employs just under 40,000.

Golden Living is based in Dallas, with the former corporate headquarters in Fort Smith now serving as the company’s administrative center. The Fort Smith facility employs around 900, according to Michelle Metzger, Golden Living director of communications.

Rumors have swirled for months about possible employment and structural changes at Golden Living, with rumors ranging from the sale of the company and loss of all Golden Living jobs in Fort Smith, to selling off a few operations with minor or no employment impact on the Fort Smith admin center.

A management letter sent to Golden Living employees this week addressed the plans to sell the three service companies.

Golden Living President and CEO Dr. Neil Kurtz
Golden Living President and CEO Dr. Neil Kurtz

“Unfortunately, today’s environment has forced us to make a very difficult decision to leave the provider tasks to others and free our world class service companies Aegis, AseraCare and 360 Staffing to grow outside of our integrated company structure,” noted the letter signed by Belinda Marcotte, Golden Living executive vice president and senior financial officer; Dr. Neil Kurtz, Golden Living president and CEO; and Ron Silva, board chairman of Golden Living.

‘NO PLANS TO CLOSE THIS OFFICE’

The letter also noted: “The decision to transition our business was not made lightly and was done only after careful consideration of all available alternatives. … With these anticipated changes in the service levels provided by Golden Living to the healthcare industry, there will be reductions in the number of employees providing support to the Administrative Service Center.”

Employees who received the letter were told their positions would likely be “eliminated before the end of 2017.” Initial severance packages offered were a week of pay for each year with the company with a cap of five years.

It is unclear how many of the 900 Fort Smith jobs would be lost when (or if) the three service companies are sold or when more nursing home operations are transferred, and Metzger declined to answer any questions from Talk Business & Politics about the letter.

In an internal memo sent Tuesday from Marcotte and Pat Powell, it was learned that Golden Living has “fully executed legal agreements in place” to shift nursing home operations in Missouri and Tennessee to another company by Sept. 1. The Marcotte and Powell memo was in response to the Diversicare announcement.

“The local Fort Smith media picked up on the story and re-published the Diversicare press release that same day before we had the opportunity to inform our employees,” the memo noted. “We know this has caused some confusion, but please know the Diversicare announcement did not originate with us. As we said last week, we are not making any official announcements and are not ready to publicly discuss any plans for the future of the Fort Smith office other than what we shared last week – that we have no plans to close this office. While there will be an impact on our office, we are not sure exactly what that impact will be as we have said.”

THE DIVERSICARE DEAL
Brentwood, Tenn.-based Diversicare on Monday (Aug. 15) announced it planned to take over management of 22 nursing homes from Golden Living – approximately 2,600 nursing home beds – in Mississippi and Alabama. The deal, subject to regulatory approvals, is expected to close in the fourth quarter. The homes would have “in excess” of $185 million in revenue for Diversicare, according to company CEO Kelly Gill.

“We are delighted to have been selected by Golden Living to receive a significant portion of their portfolio, and to become a valuable strategic partner. Golden Living has performed admirably in these centers and we look forward to continuing to build upon their historical success,” Gill said in a statement.

Metzger told KFSM 5 News that the Diversicare deal would not result in reduced employment in Fort Smith.

“We have 60,000 patients we serve a day,” Metzger told KFSM 5 News on Monday. “We’re going to need all hands on deck to do their jobs.”

However, the sources who spoke with Talk Business & Politics said a reduction in the number of nursing homes managed by Golden Living would reduce staff needs in Fort Smith. Further, selling the service companies would also reduce Fort Smith staff levels.

GOLDEN LIVING BACKGROUND
The Fort Smith admin center, completed in the late 1990s as the new corporate headquarters for Beverly Enterprises, sits on a 60-acre campus. Beverly Enterprises moved in May 1990 its corporate headquarters from Pasadena, Calif., to Fort Smith. The first building Beverly occupied in Fort Smith was part of the strip mall in the rear of Central Mall.

In 2005-2006, Fillmore Capital purchased Beverly as a friendly bidder in what began as a hostile takeover play by Alpharetta, Ga.-based Formation Capital. The deal was valued at $2.2 billion, with about $1.8 billion going to shareholders.

Golden Living announced in March 2011 that it planned to add at least 200 jobs at the Fort Smith admin center as part of a consolidation plan. The jobs consolidated most of the company’s billing for its various subsidiaries in the 5-story, 318,000-square-foot Fort Smith building. A more than $1.5 million incentive package from the Arkansas Governor’s office and the Arkansas Economic Development Commission and a smaller incentive from the Fort Smith Regional Chamber of Commerce helped secure the jobs.

Golden Living also announced in March 2011 that it would move its headquarter operations and executive management teams to Dallas (Plano).

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