ATLANTA, Jan. 8, 2013 /PRNewswire/ -- AdCare Health Systems, Inc. (NYSE MKT: ADK), a leading long-term care provider, today announced it has completed the previously announced agreement to purchase three skilled nursing facilities for $13.5 million.
The facilities include:
- Sumter Valley Nursing and Rehab Center in Sumter, South Carolina, a 96-bed facility, generating an estimated $6.7 million in annualized gross revenues, according to their most recent financials.
- Georgetown Healthcare and Rehabilitation in Georgetown, South Carolina, an 84-bed facility, generating an estimated $3.8 million in annualized gross revenues.
- Northwest Nursing Center in Northwest Oklahoma, a 88-bed facility, generating an estimated $2.4 million in annualized gross revenues. The facility is expected to generate $7.6 million in annualized gross revenue subsequent to renovation.
AdCare has financed these acquisitions with traditional bank loans.
"These acquisitions continue our M&A efforts, and expand our presence in the southern United States," said Boyd Gentry, AdCare's president and chief executive officer. "The Sumter and Georgetown facilities represent our first acquisitions in the state of South Carolina, bringing the total number of states in which Adcare owns and operates its facilities to eight. Our continued focus on the low-cost southern states and expanding presence in this region supports our ability to effectively leverage our management and administrative infrastructure, driving further improvement in our EBITDA margin as we scale. Our focus will now turn to increasing the post-acute census in these facilities as well as other measures that will improve these facilities profitability."AdCare has put under contract 51 facilities since it began its M&A campaign in the summer of 2010 and 13 since the beginning of 2012. 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 year. This would represent an increase of more than 67% from the company's revenues in 2011, and an increase of more than nine times revenues since initiating its M&A campaign. AdCare's expected annualized revenue run-rate does not include the potential revenues of the $20 million from the newly renovated sub-acute care facility in Arkansas. In addition, the Company announced that Chris Brogdon has resigned as AdCare's chief acquisitions officer. Mr. Brogdon will remain the Company's Vice Chairman, and will continue to serve AdCare as a consultant, overseeing M&A activity. Under this revised arrangement, Mr. Brogdon will continue to provide essentially the same services to the Company as he did as CAO. "We look forward to continuing to benefit from Chris' expertise and efforts," added Mr. Gentry.