AdCare Health Systems Inc. will pay $38.5 million for 15 skilled nursing facilities in four states.
Located in South Carolina, North Carolina, Virginia and Tennessee, the facilities have 1,995 beds and generate an estimated $93 million in gross annualized revenues according to their most recent financials. AdCare said its annualized run rate is expected to exceed $268 million, an increase of more than 400% over the company’s revenues in 2010.
“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.”
AdCare continues continues to look for additional acquisitions and said it’s a major focus for the second half of 2011.
“We’re evaluating a number of additional opportunities around our home base in the Midwest as well as in the Southeast,” added Brogdon.
AdCare will purchase two of the facilities, lease nine and manage four. The company plans to fund the transaction with a combination of cash, shares of AdCare common stock and seller notes.