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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
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."
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.