AdCare Health Systems to Acquire New Skilled Nursing Facility in Arkansas Acquisition of 70-bed facility in Cabot, Arkansas, expands AdCare's presence in Little Rock Metro Area
ATLANTA, Oct. 1, 2012 /PRNewswire/ -- AdCare Health Systems, Inc. (NYSE MKT: ADK), a leading long-term care provider, has signed a definitive purchase agreement for a skilled nursing facility in Arkansas for $6.3 million.
The 70-bed facility is a newly constructed, state-of-the-art, skilled nursing facility. The facility is located just minutes north of downtown Little Rock, Arkansas and in proximity to two hospitals, St. Vincent Rehab hospital and Baptist Health Medical Center North, which management believes will serve as key referral sources. As an unopened facility, there are no historical performance metrics, but management expects annualized revenue to exceed $8.5 million and contribute positively to the consolidated bottom line, inclusive of depreciation and interest expense. The acquisition is anticipated to be completed in the fourth quarter of 2012. AdCare plans to finance the majority of 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 $300 million. This would represent an increase of nearly 100% over the company's revenues in 2011, and an increase of more than 10 times revenues since initiating its M&A campaign.
"This impressive and strategically located facility squarely aligns with our strategic goals and significantly broadens our presence in the Little Rock, Arkansas region," 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 have built a solid network of referrals for our Arkansas facilities, and adding this facility, we can more effectively take advantage of our regional organization. We expect to achieve optimal results for both the Medicare rate and mix over the initial nine to 12 months of operation."
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 49 since we began our current M&A program, with the focus of our activity in the Southern region of the United States. We are making steady progress in our efforts to integrate these acquired facilities, optimize patient care, operations, occupancy, Medicare census, and reimbursement rates, while we evaluate additional acquisition opportunities."
AdCare expects to complete the acquisition of five additional facilities in the second half of 2012.
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) is a recognized provider of 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.
Boyd Gentry, CEO
Chris Brogdon, Vice Chairman & CAO
David A. Tenwick, Chairman of Board
AdCare Health Systems, Inc.
Tel (678) 869-5116
Tel (646) 536-733
SOURCE AdCare Health Systems, Inc.