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Adcare Health Systems Inc (ga) (NYSE AMEX:ADK)

WEB NEWS

Friday, October 12, 2012

Comments & Business Outlook

ATLANTA , Oct. 12, 2012 /PRNewswire/ -- AdCare Health Systems, Inc. (NYSE MKT: ADK), a leading long-term care provider, has agreed to sell six assisted living facilities located in Ohio for $22.3 million to a long-time Ohio operator of assisted living facilities. The proceeds will be used to finance the company's ongoing M&A program focused on skilled nursing facilities. The transaction is expected to close prior to December 31, 2012 .

The gain on the sale is expected to be approximately $9.1million . In addition, approximately $11.5 million in debt will be repaid by AdCare or assumed by the buyer upon closing, further reducing the company's financial leverage. Cash proceeds from the sale of the six facilities is estimated to be $6.7million at closing, and AdCare will provide $3.6 million in seller financing, which is expected to be repaid after March 2014 .

Combining the company's current annualized run-rate with transactions in the process of closing, AdCare's estimated annualized revenue run-rate is expected to exceed $300 million . This would represent an increase of nearly 100% over the company's revenues in 2011, and an increase of more than 10 times revenues since initiating its M&A campaign.

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