AdCare M&A Spree Continues, Snatches Up Five SNFs for $16 Million

Skilled nursing and assisted living provider AdCare Health Systems, Inc. (NYSE Amex:ADK), recently signed a purchase agreement for five skilled nursing facilities in Oklahoma for $16 million.

The facilities have an aggregate 357 beds that generate an estimated $15.0 million in annualized revenues, and the acquisition is anticipated to be immediately accretive to AdCare’s earnings upon closing, which is expected in early 2012.

AdCare plans on funding the transaction with a long-term loan guaranteed by the Small Business Administration.


“This signing brings the total number of facilities we’ve put under contract to 29 since the beginning of this year and represents our first-ever in Oklahoma,” said Chris Brogdon, AdCare’s vice chairman and chief acquisitions officer, in a statement. “These facilities are in line with our expansion into the South, and are consistent with our strategic objective of acquiring operations with significant Medicare and Managed Care upside.”

AdCare’s president and CEO, Boyd Gentry, said implementing the company’s system into this acquisition is expected to generate a 20-25% increase in revenue from these facilities over time.

The company has purchased or leased 26 skilled nursing or assisted living facilities representing more than 2,700 beds since it launched its M&A program in the fall of 2009. Along with other transactions announced and in the process of closing, AdCare’s estimated annualized revenue run-rate is expected to exceed $300 million, representing an increase of more than 460% over the company’s 2010 revenues, and more than 1,000% over 2009 revenues.


Written by Alyssa Gerace