Shareholder seeks sale of AdCare Health Systems

A major shareholder of a Roswell-based long-term care provider wants the company to put itself on the market.

Chris Doucet, the CEO of Doucet Asset Management, said in a letter to the board of AdCare Health Systems that the company is well undervalued. Though he said he welcomed AdCare’s announcement in May that it was evaluating strategic alternatives, he added such an analysis “is long overdue.”

“Speaking on behalf of my family and clients who have a stake in this Company, there is only one strategic alternative to consider here and that is to sell the Company,” Doucet said in his letter to the board, which was filed with the Securities and Exchange Commission. Doucet’s firm controls about 8 percent of AdCare’s stock.

An AdCare spokesman declined comment.

AdCare President and CEO Boyd Gentry stepped down in May. At the time, company spokesman Brett Maas told The Atlanta Journal-Constitution that AdCare was exploring alternatives including a possible sale.

Shareholders have complained about the company’s high corporate expenses.

David Tenwick, AdCare’s chairman and now interim CEO, said last month that he planned to work with the board “to take purposeful steps to drive shareholder value.”

At the end of 2013, AdCare owned 26 skilled nursing and assisted living centers. It leases or manages another 20 care facilities.

AdCare reported a $3 million loss in the first quarter, following losses of $14.1 million in 2013 and $7 million in 2012.

In his letter, Doucet said he believed the value of the company is between $6.44 per share and $8.22 per share, based largely on its real estate holdings. AdCare stock closed Wednesday at $4.30 a share.

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