Monday, December 04, 2006

CapitalSource Buys. But What Are the Returns?

CapitalSource Inc. (NYSE: CSE), announced that it has completed the purchase of 77 long-term care facilities for approximately $462 million. The dollar amount approaches 50% of the equity yet no additional information regarding how the transaction was financed and at what spreads was provided.

If it was big enough to announce than it is big enough to provide some substantive commentary on all the ramifications.

Me thinks the company may be acquisition hungry with too much of a gun slinger close the deal mentality. Management needs to talk to the market more extensively.