, Oct. 12, 2012 /PRNewswire/ --
AdCare Health Systems, Inc.
(NYSE MKT: ADK), a leading long-term care provider, has agreed to sell six assisted living facilities located in
to a long-time
operator of assisted living facilities. The proceeds will be used to finance the company's ongoing M&A program focused on skilled nursing facilities. The transaction is expected to close prior to
December 31, 2012
The six facilities have an aggregate of 196 units in service and an estimated
in gross annualized revenues. The company will continue to operate two assisted living facilities in
, and one in
"This transaction bolsters our balance sheet and provides additional capital to finance our ongoing M&A activity involving skilled nursing facilities," said
, AdCare's president and chief executive officer. "These divested facilities have operated profitably and have been valuable to our organization, but we believe there are greater opportunities in expanding our skilled nursing business. During the last 18 months, our new optimization strategies have resulted in increased facility occupancy and Medicare census for both our new and existing skilled nursing facilities, as well as better reimbursement and improved patient care. This transaction will fuel an acceleration of this strategy, allowing us to apply this success on a much greater scale."
The gain on the sale is expected to be approximately
. In addition, approximately
in debt will be repaid by AdCare or assumed by the buyer upon closing, further reducing the company's financial leverage. Cash proceeds from the sale of the six facilities is estimated to be
at closing, and AdCare will provide
in seller financing, which is expected to be repaid after
, AdCare's vice chairman and chief acquisitions officer, added, "We are making great progress in our efforts to integrate the new facilities acquired to date, and remain focused on additional M&A activity over the remainder of 2012 and into 2013. We are evaluating a number of opportunities that fit our acquisition strategy in the Southern region of the U.S., and believe we can accelerate our revenue growth to more effectively leverage our proven model."
Before the end of the year, AdCare plans to complete the acquisition of seven facilities in
it has already placed under contract.
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
. 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.
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 through its operating subsidiaries, including a broad range of skilled nursing and sub-acute care services. For more information about AdCare, visit
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.
SOURCE AdCare Health Systems, Inc.