AdCare Health Systems Signs Agreement for 15 Skilled Nursing Centers Across South Carolina, North Carolina, Virginia, and Tennessee

AdCare Health Systems ADK has signed a definitive agreement to acquire, lease or become the manager of 15 skilled nursing facilities in South Carolina, North Carolina, Virginia, and Tennessee for $38.5 million. Two of the facilities are to be purchased, nine leased, and four managed by AdCare. The facilities have an aggregate of 1,995 beds and generate an estimated $93 million in gross annualized revenues according to their most recent financials. They are expected to be immediately accretive to AdCare's earnings after the transaction closes as planned in the fall. The company plans to fund the transaction with a combination of cash, shares of AdCare common stock, and seller notes. Combined with other transactions previously announced and in the process of closing, AdCare's estimated annualized revenue run-rate is expected to exceed $268 million. This would represent an increase of more than 400% over the company's revenues in 2010, and an increase of more than 900% over revenues in 2009 when it initiated its current M&A campaign. "This agreement brings the total number of facilities we've put under contract to 46 since we began our M&A campaign in the fall of 2009, and is by far our largest transaction to-date," said Chris Brogdon, AdCare's vice chairman and chief acquisitions officer. "It represents our first entrance into South Carolina, Virginia, and Tennessee, and expands our presence in North Carolina. The addition of these facilities is in line with our expansion into the Southeast, and will leverage the support staff we've already established in the region."