SOURCE: AdCare

AdCare

April 13, 2010 08:00 ET

AdCare Health Systems to Acquire Alabama Assisted Living Facility for $5.0 Million

SPRINGFIELD, OH--(Marketwire - April 13, 2010) -  AdCare Health Systems, Inc. (NYSE Amex: ADK), an Ohio-based long-term care, home care and management company, has signed a definitive purchase agreement for a privately-held assisted living facility in Hoover, Alabama (a suburb of Birmingham) for $5.0 million.

The 105-unit facility, which AdCare is purchasing from a bank, is currently 59% occupied. At 85% occupancy, the facility is capable of producing annual revenue of more than $3.0 million. Management expects to close the transaction within 45-60 days.

"This is the third facility we have agreed to acquire in the last few weeks, and one of several potential acquisitions in our pipeline," said Chris Brogdon, AdCare's vice chairman and chief acquisitions officer. "We have secured financing to purchase this facility, and when occupancy improves under our more capable management, we expect this acquisition to be very profitable for AdCare."

"We plan to take further advantage of foreclosures and poorly run facilities, which we can purchase below market prices, and target acquisitions of both profitable and turnaround properties to grow our company," said Brogdon.

The financing to purchase the 105-unit assisted living facility will be provided via a 30 year fixed-rate loan. According to Brogdon: "This kind of affordable, long-term financing is typical of what we expect for future acquisitions of this type. It allows AdCare to expand its operations quickly through acquisitions without being dilutive to shareholders or creating a complicated capital structure."

Brogdon joined AdCare last September when the company announced a new M&A growth strategy to build upon its strong reputation for operational efficiency and high-quality living environments, as well as its increasing financial strength. AdCare recently reported its fifth consecutive year of revenue growth and its first profitable year as a public company.

About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE Amex: ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly traded company in November of 2006, AdCare operated as a private company for 18 years. AdCare's 850 employees provide high-quality care, management services and other services for patients and residents residing in 19 facilities, six of which are assisted living facilities, 11 skilled nursing centers and two independent senior living communities. The company has ownership interests in eight of those facilities. In the ever-expanding marketplace of long-term care, AdCare's mission is to provide quality healthcare services to the elderly. For more information about AdCare, visit www.adcarehealth.com.

Safe Harbor Statement
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward-looking statements involve known and unknown risks, results, performance or achievements of the company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the company with the Securities and Exchange Commission and include the company'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 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.

Contact Information

  • Company Contact
    Chris Brogdon
    Vice Chairman and Chief Acquisitions Officer
    AdCare Health Systems, Inc.
    Tel (937) 964-8974
    Email: Email Contact

    Investor Relations
    Scott Liolios or Ron Both
    Liolios Group, Inc.
    Tel (949) 574-3860
    Email: Email Contact