AdCare Health Systems, Inc., a recognized innovator in senior living and health care facility management, has completed the acquisition of Mountain Trace Nursing Center, a 106-bed nursing facility in Sylva, North Carolina for $6.1 million, with the closing effective on January 1, 2011.
The facility generates an estimated $7.8 million in annualized revenues, and is expected to immediately provide positive cash flow to AdCare.
“Mountain Trace is the thirteenth facility we’ve acquired or leased since we began our M&A campaign at the end of last year,” said Chris Brogdon, AdCare’s vice chairman and chief acquisitions officer. “It represents our first entrance into North Carolina and is in line with our expansion into the Southeast. As reflected in this facility’s high occupancy, this acquisition is well-supported by regional demographics.”
With the addition of Mountain Trace, plus three skilled nursing centers AdCare expects to close in the first quarter of 2011, the company’s estimated annualized revenue run-rate exceeds $140 million, representing an increase of more than 424% over annual revenues of $26.7 million in 2009.
David A. Tenwick, AdCare’s chairman, commented: “In 2010, our extensive M&A activity expanded both our organizational structure and territorial landscape, including a new Southeast division to manage our newly acquired facilities in North Carolina, Georgia, and Alabama. Given the timing of these acquisitions over the course of 2010, we maintain our expectation for revenues of approximately $52 million for 2010, or nearly double 2009. Our outlook for 2011 remains extremely bullish, in terms of both organic and acquisition-related growth. We will continue to aim higher as we build upon the strong foundation we laid in 2010.”
Added Brogdon: “Choice acquisition and leasing opportunities continue to emerge in the Southern region of the U.S., as well as around our home base in the Midwest. Our M&A pipeline will remain a major focus as we begin 2011.”
AdCare plans to finance the acquisition of Mountain Trace through a bank loan guaranteed by the United States Department of Agriculture (USDA) under a special program designed to provide long-term financing for rural projects at favorable rates. Until the documentation necessary for the USDA guaranteed financing is completed, AdCare secured the transaction with a short-term bridge bank loan.
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