UPDATE: Imperial Capital Initiates AdCare Health Systems at Outperform on Facilities Consolidation

Imperial Capital initiated coverage on AdCare Health Systems (NYSE: ADK) with an Outperform rating and a $7 price target. Imperial Capital commented, "The company has been acquiring 10-15 facilities per year, primarily focused on three geographic areas (Ohio, Arkansas/Oklahoma, and Georgia). Its revenue run-rate has increased nearly ten-fold over the past three years. We forecast acquisitions to continue at a similar pace in 2013; closing the year with approximately 56 facilities, including 39 owned facilities. Our 2013 EBITDA growth forecast assumes relatively consistent performance from its current portfolio that we estimate will close the year contributing ~$26mn to EBITDA, with operational improvements and acquisitions driving the growth."AdCare Health Systems closed at $4.38 on Wednesday.