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

AdCare Health Systems, Inc., a leading skilled nursing and assisted living provider, 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.”

“We’re evaluating a number of additional opportunities around our home base in the Midwest as well as in the Southeast,” added Brogdon, “with our M&A program continuing to be a major focus as we enter the second half of 2011.”

This press release does not constitute an offer to sell or solicitation of an offer to buy any securities. The shares of AdCare common stock issued or to be issued in the transaction will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such act.

Conference Call and Webcast

AdCare will hold a conference to discuss the transaction today, June 28, 2011, at 10:30 a.m. Eastern time. Management will host the presentation, followed by a question and answer period.

Date: Today, Tuesday, June 28, 2011
Time: 10:30 a.m. Eastern time (7:30 a.m. Pacific time)
Dial-In Number: 1-877-941-8602
International: 1-480-629-9811
Conference ID#: 4452739

The conference call will be broadcast simultaneously at and available for replay via the investor section of the company’s Web site at

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact the Liolios Group at 949-574-3860.

A replay of the call will be available after 1:30 p.m. Eastern time on the same day and until July 28, 2011:

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay pin number: 4452739

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