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2020 | OriginalPaper | Chapter

14. Ensign Group: The Spin-Off of CareTrust REIT

Authors : Eli Amir, Marco Ghitti

Published in: Financial Analysis of Mergers and Acquisitions

Publisher: Springer International Publishing

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Abstract

A spin-off is basically a dividend-in-kind whereby a company distributes shares in a subsidiary to its shareholders on a pro-rata basis. The purpose of this case is to explain the reasons why companies spin-off parts of their operations. We also explain and demonstrate the accounting treatment of a spin-off transaction highlighting the differences between US GAAP and IFRS. We use the interesting case of Ensign where the spun-off entity is a Real Estate Investment Trust (REIT). The transactions unlocked value for the existing shareholders and created an attractive investment in a REIT for new and existing investors.

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previous chapter Nokia Siemens Networks: Purchase Accounting, Equity Method, and Proportionate Consolidation

next chapter Altria Group: The Carve-Out and Spin-Off of Kraft

This case study analyzes the spin-off transaction based on the consolidated financial statements of Ensign (not its separate financial statements).

CTRE press release, June 3, 2014.

CTRE annual report 2014.

CTRE quarterly report as of June 30, 2014.

Ensign quarterly report as of September 30, 2014.

Ensign press release, June 3, 2014.

Ensign press release, November 7, 2013.

Title: Ensign Group: The Spin-Off of CareTrust REIT
Authors: Eli Amir
Marco Ghitti
Publisher: Springer International Publishing
Book: Financial Analysis of Mergers and Acquisitions
Print ISBN: 978-3-030-61768-4

Electronic ISBN: 978-3-030-61769-1

Copyright Year: 2020
DOI: https://doi.org/10.1007/978-3-030-61769-1_14