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BRENTWOOD, Tenn., Aug. 7, 2017 /PRNewswire/ -- AAC Holdings, Inc. (NYSE: AAC) has signed a definitive agreement to sell its two standalone outpatient facilities and two sober living facilities in Las Vegas, Nevada and Arlington, Texas for $25 million in cash to MedEquities Realty Trust, Inc. (NYSE: MRT). Concurrently with the sale, the Company will lease the facilities from MedEquities pursuant to a 15-year triple-net lease at an initial lease rate of 8.75%. AAC expects to deploy the proceeds to pay down borrowings on its revolving credit facility and fund its de novo activities. The transaction is expected to close by August 11, 2017, subject to customary closing conditions.
The AAC facilities that are included in the sale are the two standalone outpatient treatment facilities in Las Vegas, Nevada and Arlington, Texas; a 110-bed sober living facility in Las Vegas; and a 56-bed sober living facility in Arlington that is expected to expand to 131 beds by mid-year 2018. These four facilities support AAC's flagship inpatient residential treatment facilities, Desert Hope in Las Vegas and Greenhouse in Arlington.
"This transaction unlocks the value in the outpatient and sober living operations we have created in our Las Vegas and Arlington platforms together with our Desert Hope and Greenhouse facilities," noted Michael Cartwright, Chairman and Chief Executive Officer of AAC Holdings, Inc. "This capital will help us reduce leverage and fund our de novo and bed expansion activity for 2017 and 2018."
About American Addiction Centers American Addiction Centers is a leading provider of inpatient and outpatient substance abuse treatment services. We treat clients who are struggling with drug addiction, alcohol addiction, and co-occurring mental/behavioral health issues. We currently operate substance abuse treatment facilities located throughout the United States. These facilities are focused on delivering effective clinical care and treatment solutions. For more information, please find us at AmericanAddictionCenters.org or follow us on Twitter @AAC_Tweet.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are made only as of the date of this release. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "may," "potential," "predicts," "projects," "should," "will," "would," and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements may include information concerning AAC Holdings, Inc.'s (collectively with its subsidiaries; "Holdings" or the "Company") possible or assumed future results of operations, including descriptions of Holdings' revenues, profitability, outlook and overall business strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from the information contained in the forward-looking statements. These risks, uncertainties and other factors include, without limitation: (i) our inability to operate our facilities; (ii) our reliance on our sales and marketing program to continuously attract and enroll clients; (iii) a reduction in reimbursement rates by certain third-party payors for inpatient and outpatient services and point of care and definitive lab testing; (iv) an increase in our provision for doubtful accounts based on the aging of receivables; (v) our failure to successfully achieve growth through acquisitions and de novo expansions; (vi) uncertainties regarding the timing of the closing of acquisitions; (vii) the possibility that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of an acquisition; (viii) our failure to achieve anticipated financial results from prior acquisitions; (ix) a disruption in our ability to perform definitive drug testing services; (x) maintaining compliance with applicable regulatory authorities, licensure and permits to operate our facilities and lab; (xi) a disruption in our business and reputation and potential economic consequences with the civil securities claims brought by shareholders; (xii) our inability to meet our covenants in the loan documents; (xiii) our inability to integrate newly acquired facilities; and (xiv) general economic conditions, as well as other risks discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K, and other filings with the Securities and Exchange Commission. As a result of these factors, we cannot assure you that the forward-looking statements in this release will prove to be accurate. Investors should not place undue reliance upon forward looking statements.
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