Behrman Capital Sells Ark Holdings In a Transaction Valued at $525 Million

Omega Announces Closing of Sale/Leaseback Transaction with Ark Holding Company, Inc.

Company Release – 12/03/2013 09:00

HUNT VALLEY, Md.–(BUSINESS WIRE)– Omega Healthcare Investors, Inc. (NYSE:OHI) (“Omega”) today announced the closing, effective as of November 27, 2013, of its previously announced $525 million sale/leaseback transaction for 56 facilities operated by Ark Holding Company, Inc. (“Ark Holding”). The sale/leaseback transaction was consummated in connection with the acquisition by merger of Ark Holding by 4 West Holdings, Inc. (“4 West”) on November 27, 2013. Ark Holding was previously owned by private equity firm Behrman Capital. As part of the transaction, Omega acquired title to 55 skilled nursing facilities and 1 assisted living facility and leased them back to the prior operators pursuant to a 50-year capital lease with rental payments to Omega yielding 10.6% per annum over the term of the lease.

The 56 facilities represent 5,717 licensed beds located in 12 states, predominantly in the southeastern United States. The 56 facilities are separated by region and divided among four cross-defaulted Master Leases. The four regions include the Southeast (39 facilities), the Northwest (7 facilities), Texas (9 facilities) and Indiana (1 facility). The initial year one contractual rent is $47 million with 2.5% escalators beginning in year five.

Founded by Behrman Capital in 2007 and based in Memphis, Tennessee, Ark Holding (historically doing business as Covenant Dove) was one of the largest privately held skilled nursing facility operators in the country. New Ark Investment, Inc., as Ark Holding will now be known, has nearly 5,500 employees. Two key employees, Christopher Murphy and Michael Bagley have been retained by New Ark and will remain on as its CEO (promoted from COO) and CFO, respectively.

4 West is an affiliate of Health Care Navigator (“HCN”) and is based in White Plains, New York. HCN is a long term care consulting and advisory company providing services to over 120 skilled nursing and assisted living facilities, representing more than 14,000 beds throughout the country.

Omega Healthcare Investors, Inc. is a real estate investment trust investing in and providing financing to the longterm care industry. At September 30, 2013, Omega owned or held mortgages on 477 skilled nursing facilities, assisted living facilities and other specialty hospitals with approximately 55,066 licensed beds (52,881 available beds) located in 33 states and operated by 48 third-party healthcare operating companies.

This announcement includes forward-looking statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of Omega’s properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of Omega’s operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of Omega’s mortgages, and impede the ability of Omega to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s obligations; (v) the availability and cost of capital; (vi) competition in the financing of healthcare facilities; (vii) Omega’s ability to maintain its status as a real estate investment trust; and (viii) other factors identified in Omega’s filings with the Securities and Exchange Commission. Statements regarding future events and developments and Omega’s future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements.