The transaction was effective Dec. 1. Terms were not disclosed, but Signature president and CEO Joe Steier said in an interview that it likely would cost his company $6 million to $10 million to integrate the new centers. He said that could take about six months.
Seventeen of the homes are in Kentucky, and the other is in Pennsylvania. They’re split about evenly between urban and rural markets.
What’s in it for Signature
The deal allows Signature to bypass a big barrier to entry for health care companies looking to expand into new Kentucky territories: the certificate of need, or CON, process, which verifies that a market is in need of the services a company wants to provide.
“It’s so hard to get new CONs in Kentucky,” Steier said. Buying these facilities gets Signature into rural markets without having to go through that “long, expensive process,” which he said could take as many as five years — with “no guarantee you’ll get one.”
As a result of the deal with Elmcroft, Signature now serves 80 contiguous counties in Kentucky, which will allow “patients to move freely” between Signature’s centers if they need or want to, Steier said.
For Signature, the deal is “about continuity, access and cost,” he said.
The acquisition will give Signature one center each in two of its more prominent markets, Louisville and Lexington.
The company now operates 133 post-acute care centers across the country, including 41 in Kentucky.
Another draw was the “impressive” roughly 2,000-strong staff at the Elmcroft facilities, Steier said. Signature will now employ 23,000 in the U.S. and 7,400 in Kentucky, and it will add about 20 new posts at its corporate headquarters and 18 regional positions to serve the new facilities.
