SPRINGFIELD, Ohio, Dec. 9 /PRNewswire-FirstCall/ -- AdCare Health Systems, Inc. (NYSE AMEX: ADK), an Ohio based long term care, home care and management company, today reported that it completed a private placement of its securities.
The private placement raised $2.5 million in cash to fund the Company's growth initiatives, which include potential acquisitions of assisted living facilities and nursing homes as well as new management contracts.
"We are pleased that our shareholders voted to support the private placement and other issues at the special meeting of shareholders held a few days ago," said David A. Tenwick, Chairman of AdCare. "This is another important milestone in our strategy to continue and complement our organic growth with growth through acquisitions in a highly fragmented industry. AdCare has developed a strong reputation for operational efficiency and high quality living environments, and with the additional capital from the private placement, we plan to leverage these strengths to achieve our growth objectives."
The private placement was managed by Bathgate Capital Partners LLC, a full-service investment banking firm headquartered in the Denver suburb of Greenwood Village, Colorado. The placement consisted of Units priced at $2.00, with each unit consisting of one share of common stock and one five-year warrant to purchase an additional share of common stock at $2.50 per share. Bathgate Capital Partners placed a total of 1,400,000 Units, which raised $2.5 million in cash after commissions and expenses for the Company.AdCare recently reported revenue of $19.9 million for the nine-month period ended September 30, 2009, up 9.4% from, revenue of $18.2 million in the same period a year ago. Net income increased to $443,000, a $1.2 million positive swing over the net loss of $745,000 in the year ago period. EPS was $0.12 versus a loss of $0.21 for the same period a year ago. In addition to approving the private placement at the special meeting of shareholders held on December 7, 2009, the shareholders approved conforming the terms of AdCare's public warrants that were issued in the Company's initial public offering with the terms of the new warrants that will be issued in the private placement. The warrant holders' meeting to vote on the matter is December 16, 2009; however, the completion of the private placement was not contingent upon approval by the warrant holders.