AdCare Health Systems, Inc. (ADK) Signs Definitive Purchase Agreement for South Carolina Skilled Nursing Facility

Leading long-term care provider AdCare Health Systems announced it has signed a definitive purchase agreement to acquire a skilled nursing facility in South Carolina for $4.2 million.

The facility, which generates an estimated $3.8 million in gross annualized revenues according to its latest financials, has 84 beds in service. It is anticipated that the acquisition will be completed in the fourth quarter of 2012. AdCare intends to finance the acquisition of the facility through a traditional bank loan.

With AdCare’s current annualized run-rate, combined with transactions in the process of closing, the company’s estimated annualized revenue run-rate is anticipated to exceed $280 million, which would represent an increase of more than 84 percent over its 2011 revenues and an increase of more than 10 times its revenues since initiating its M&A campaign. This latest transaction supports AdCare’s aggressive M&A strategy of targeting skilled nursing properties that are underperforming, for the purposes of facility optimization. The company’s optimization strategy involves leveraging its regional teams to increase facility occupancy and Medicare census, in addition to optimizing reimbursement and patient care. AdCare expects this strategy to generate a substantial increase in revenues.

This latest signing brings the total number of facilities AdCare has put under contract to 48 since the company’s current M&A program began. This M&A program, along with integrating the new facilities, remains AdCare’s primary focus in the second half of 2012, as the company continues evaluating a number of opportunities in the Southern region of the United States that fit its acquisition strategy. The company plans to complete the acquisition of at least eight additional facilities in the second half of 2012, which include the facility announced today, an additional facility in South Carolina, and six facilities in Oklahoma.

AdCare Health Systems is a renowned innovator in senior living and healthcare facility management, owning and managing long-term care facilities and retirement communities. Since the company was created in 1988, its aim has been to provide elderly patients with the highest quality healthcare services, including an array of skilled nursing and sub-acute care services.

For more information, visit the company’s Web site at www.adcarehealth.com

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