PACS Group (PACS) Registration Filing summary

Company overview and business model

• Operates 276 post-acute care facilities across 15 states, serving over 29,000 patients daily as of September 1, 2024.

• Focuses on skilled nursing, senior care, assisted living, and independent living, with a strategy of acquiring underperforming facilities and converting them to high-acuity, short-term transitional care.

• Employs a decentralized operating model, empowering local facility leaders and providing centralized support services (PACS Services) for technology, compliance, and back-office functions.

• Growth driven by disciplined acquisitions, with a three-year post-acquisition transition period to implement best practices and improve clinical and operational metrics.

• Facilities are primarily leased, with ongoing efforts to increase real estate ownership for financial flexibility and value creation.

Financial performance and metrics

• For the six months ended June 30, 2024: revenue $1.9B, net income $38.2M, operating expenses $1.8B, Adjusted EBITDA $188.2M.

• For the year ended December 31, 2023: revenue $3.1B, net income $112.9M, operating expenses $2.9B, Adjusted EBITDA $237.5M.

• Revenue mix for 2023: Medicare 38.6%, Medicaid 37.6%, with the remainder from managed care and private pay.

• As of June 30, 2024: total long-term liabilities $2.9B, cash and cash equivalents $73.4M.

• Mature facilities (owned >36 months) have a 94% occupancy rate and 4.3 average CMS QM Star rating, both above industry averages.

Use of proceeds and capital allocation

• Net proceeds of ~$104.8M from the offering (at $39.67/share) will be used to repay amounts outstanding under the Amended and Restated 2023 Credit Facility.

• No proceeds from shares sold by selling stockholders; company has broad discretion in capital allocation.