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AdCare Health Systems, Inc. (ADK) Signs New Agreement to Purchase Skilled Nursing and Assisted Living Community for $13.5 Million

|Includes: Regional Health Properties, Inc. (RHE)

AdCare Health Systems, Inc., a leading provider of skilled nursing and assisted living facility management, announced today that they will purchase for $13.5 million an Ohio skilled nursing and assisted living community. The community has 193 beds and generates about $12 million in gross annualized revenues. AdCare plans to finance the acquisition of the assisted living facility with a 30-year, fixed-rated, tax-exempt bond issuance, and finance the skilled nursing facility with a traditional bank loan.

“Our strategy of acquiring skilled nursing facilities is proving highly successful, not only in our closing rate and terms, but also in our post-acquisition performance. We have been targeting facilities that have not traditionally concentrated on providing post-acute services, and then once acquired, we optimize patient care, occupancy and quality mix,” said Boyd P. Gentry, president and chief executive officer, AdCare, in the announcement.

With this transaction, AdCare will have acquired 44 new facilities since 2009 with over 4,890 beds. AdCare anticipates this year’s annualized revenue to exceed $280 million when this and other deals close, which will be a 426% over the company’s revenues in 2010 and more than 949% over revenues in 2009 when it initiated the current M&A campaign.

“Since establishing new operations in Alabama, Georgia and North Carolina, we’ve now made our first acquisition in the state of our origins,” said Chris Brogdon, vice chairman and chief acquisitions officer, AdCare, in a press release on Friday. “These new facilities will leverage the professional support staff we’ve long maintained in Ohio, as well as enhance our overall economies of scale.”

AdCare’s 3,200 employees provide high-quality care for patients and residents residing in the 31 facilities that they manage, 23 of which are skilled nursing centers, seven assisted living facilities and one independent senior living community. AdCare owns seven of the skilled nursing centers and six of the assisted living facilities. In addition, AdCare has lease agreements on eleven skilled nursing centers. AdCare currently operates in Ohio, Georgia, Alabama and North Carolina.

For more information about AdCare, please visit adcarehealth.com

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