AdCare Health Systems To Acquire Skilled Nursing And Assisted Living Center In Arkansas For $4.2M
Springfield, OH (Marketwire) - AdCare Health Systems, Inc. (NYSE Amex: ADK), a leading provider of skilled nursing and assisted living for seniors, has signed a definitive agreement to purchase a skilled nursing and assisted living community in Mountain View, Arkansas for $4.2 million.
The facilities have an aggregate of 129 beds that generated an estimated $5.2 million in gross annualized revenues according to its most recent financials. The transaction is expected to be immediately accretive to AdCare's earnings when it closes as planned in the fourth quarter of 2011.
The company expects to fund the transaction with a long-term loan guaranteed by the United States Department of Agriculture (USDA). The USDA guarantee is provided through a program developed by the federal government to supply long-term financing for rural projects at favorable rates.
Combined with other transactions previously announced and in the process of closing, AdCare's estimated annualized revenue run-rate is expected to exceed $285 million. This would represent an increase of more than 436% over the company's revenues in 2010, and an increase of more than 969% over revenues in 2009 when it initiated its current M&A campaign.
"This signing brings the total number of facilities we've put under contract to 24 since the beginning of this year, with now six in Arkansas," said Chris Brogdon, AdCare's vice chairman and chief acquisitions officer. "The addition of these facilities is in line with our expansion into the Southeast, and will leverage the professional support staff we've already established in the region."
"This acquisition fits our strategic objective of acquiring operations with Medicare and Managed Care upside. There is good opportunity in this already well-run building," said Boyd Gentry, president and CEO of AdCare. "On average, AdCare has been successful at improving acquired facility Medicare and Managed Care rates and census by 17% and 40%, respectively."
"We are continuing to evaluate a number of attractive opportunities around our original home base in the Midwest as well as in the Southeast," added Brogdon, "with our M&A program and the integration of new facilities remaining our primary focus going forward."
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE Amex: ADK) is a recognized innovator in senior living and health care facility management. AdCare develops, owns and manages assisted living facilities, nursing homes and retirement communities, as well as provides home health care services. Since its inception in 1988, AdCare's mission has been to provide the highest quality of healthcare services to the elderly. For more information about AdCare, visit www.adcarehealth.com.
Important Cautions Regarding Forward-Looking Statements
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such statements can be identified by the use of forward-looking terminology, such as "believes," "expects, " "plans," "intends," "anticipates" and variations of such words or similar expressions, but their absence does not mean that the statement is not forward-looking. Statements in this announcement that are forward-looking include, but are not limited to, statements that the company expect its annualized revenue run-rate to exceed an estimated $285 million, and this would represent an increase of more than 436% over the company's revenues in 2010, and an increase of more than 969% over revenues in 2009 when the company initiated its current M&A campaign, as well as statements regarding the signing and expected closing of the transaction and the transaction being accretive to the company's earnings. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management, and involve known and unknown risks, results, performance or achievements of AdCare which may differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by AdCare with the SEC and include, among others, AdCare's ability to secure lines of credit and/or an acquisition credit facility, find suitable acquisition properties at favorable terms, changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs and changes in the competitive marketplace. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements. Except where required by law, AdCare undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.
SOURCE: AdCare Health Systems, Inc.