ATLANTA, GA--(Marketwire -08/27/12)- AdCare Health Systems, Inc. (ADK), a leading long-term care provider, has signed a definitive purchase agreement for a skilled nursing facility in South Carolina for $4.2 million.
The facility has 84 beds in service and generates an estimated $3.8 million in gross annualized revenues according to its most recent financials. The acquisition is anticipated to be completed in the fourth quarter of 2012. AdCare plans to finance the acquisition of the facility with a traditional bank loan.
Combining the company's current annualized run-rate with transactions in the process of closing, AdCare's estimated annualized revenue run-rate is expected to exceed $280 million. This would represent an increase of more than 84% over the company's revenues in 2011, and an increase of more than 10 times revenues since initiating its M&A campaign.
"This transaction supports our aggressive M&A strategy of targeting underperforming skilled nursing properties for facility optimization," said Boyd Gentry, AdCare's president and chief executive officer. "Our optimization strategy leverages our regional teams to increase facility occupancy and Medicare census, as well as optimize reimbursement and patient care. We expect this strategy to generate a significant increase in revenues."
According to Chris Brogdon, AdCare's vice chairman and chief acquisitions officer: "This signing brings the total number of facilities we've put under contract to 48 since we began our current M&A program. With our M&A program and the integration of new facilities remaining our major focus in the second half of 2012, we continue to evaluate a number of opportunities that fit our acquisition strategy in the Southern region of the U.S."
AdCare expects to complete the acquisition of at least eight additional facilities in the second half of 2012: the facility announced today, another facility in South Carolina, and six facilities in Oklahoma.
About AdCare Health Systems
AdCare Health Systems, Inc. (ADK) is a recognized innovator in senior living and health care facility management. AdCare owns and manages long-term care facilities and retirement communities, and since the company's inception in 1988, its mission has been to provide the highest quality of healthcare services to the elderly, including a broad range of skilled nursing and sub-acute care services. 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 made by Mr. Gentry that the company expects better results, as well as other statements regarding the signing and closing of expected acquisitions, and the company's expected annualized run-rate. Such forward-looking statements reflect management's beliefs and assumptions and are based upon 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 Securities and Exchange Commission 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 health care 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.
In addition, each facility mentioned in this press release is operated by a separate, wholly owned, independent operating subsidiary that has its own management, employees and assets.
References to the consolidated company and its assets and activities, as well as the use of terms such as "we," "us," "our," and similar verbiage, is not meant to imply that AdCare Health Systems, Inc. has direct operating assets, employees or revenue or that any of the facilities, the home health business or other related businesses are operated by the same entity.