AdCare Health Systems (NYSE:ADK) announced Monday it has signed a definitive agreement to purchase a skilled nursing and assisted living community in Mountain View, Arkansas for $4.2 million.
In aggregate, the facilities have 129 beds that generated an estimated $5.2 million in annualized revenue. Expected to close in the fourth quarter of 2011, AdCare plans to fund the transaction with a long term loan guaranteed by the United States Department of Agriculture (USDA).
“This signing brings the total number of facilities we’ve put under contract to 24 since the beginning of this year, with now six in Arkansas,” said Chris Brogdon, AdCare’s vice chairman and chief acquisitions officer. “The addition of these facilities is in line with our expansion into the Southeast, and will leverage the professional support staff we’ve already established in the region.”
“This acquisition fits our strategic objective of acquiring operations with Medicare and Managed Care upside. There is good opportunity in this already well-run building,” said Boyd Gentry, president and CEO of AdCare. “On average, AdCare has been successful at improving acquired facility Medicare and Managed Care rates and census by 17% and 40%, respectively.”
“We are continuing to evaluate a number of attractive opportunities around our original home base in the Midwest as well as in the Southeast,” added Brogdon, “with our M&A program and the integration of new facilities remaining our primary focus going forward.”