Nursing home operator AdCare Health Systems Inc. (AMEX:ADK) has raised $11.8 million in debt to continue its aggressive acquisition strategy.
The funding was sourced from 18 investors, with the first sale coming on Oct. 26, according to a regulatory document filed by the Springfield, Ohio-based company.
Earlier this week, Adcare said it had closed on the leases of two Georgia nursing homes, which have a combined 300 beds and annual revenues of $21 million. The company paid $4.35 million for the two nursing homes, and also provided the lessor with about 390,000 shares of its common stock.
The company has closed five “major” transactions since it began its acquisition campaign at the end of 2009, said Chris Brogdon, chief acquisition officer. “We expect these facilities to be significant cash generators for AdCare,” he said.
The company plans to pursue other acquisitions, with a focus on the Midwest and Southeast, Brogdon said.
Adcare has closed multiple financing transactions during the last year aimed at fueling its acquisitions binge. Most of the roughly 30 senior living facilities the company manages are located in Ohio.
Adcare’s stock was trading at $4.16 early Friday, and is up about 11 percent on the year, compared to an increase of about 7.5 percent for the Dow Jones Industrial Average.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
CFO Scott Cunningham didn’t immediately return a call.
