Assisted Living Concepts Makes Announcement.

PORTLAND, Ore.--(BUSINESS WIRE)--Oct. 21, 1997--Assisted Living Concepts, Inc. (AMEX: ALF), today announced the pricing of concurrent public offerings of 3.6 million shares of common stock at $18.50 per share and $75.0 million of 6.0% convertible subordinated debentures due 2002. The offerings are scheduled to close on October 24, 1997.

The debentures, which are non-callable for three years, will be convertible into shares of the Company's common stock at a conversion price of $22.57 per share. The debentures will trade on the American Stock Exchange under the symbol ALF.B.

The underwriters for the common stock offering include Schroder & Co. Inc. as lead-manager and Morgan Stanley Dean Witter, Smith Barney Inc., J.C. Bradford & Co., Equitable Securities Corporation, Advest, Inc. and Sutro & Co. Incorporated as co-managers. The underwriters for the convertible subordinated debenture offering include Schroder & Co. Inc. as lead-manager and Morgan Stanley Dean Witter and Smith Barney Inc. as co-managers. The underwriters have been granted an option to purchase up to an additional 540,000 shares of common stock and $11.25 million of convertible subordinated debentures to cover over-allotments, if any.

The offerings will result in net proceeds to the Company of approximately $135.2 million, after deducting underwriting discounts and commissions and expenses of the offerings. The Company intends to use the net proceeds from the offerings to repay indebtedness associated with the Company's owned residences, to consummate the acquisitions of Home and Community Care, Inc. and Carriage House Assisted Living, Inc. and for general working capital purposes, including the development and construction of additional assisted living residences.

Assisted Living Concepts, Inc. owns, leases operates and develops free-standing assisted living residences, primarily in small middle-market rural and suburban communities. In addition to housing, the Company provides personal care and support services and makes available routine nursing services (as permitted by state regulation) designed to meet the health care needs of its residents. The Company believes that this combination of residential, personal care, support and health care services provides a cost-efficient alternative and affords an independent lifestyle for individuals who do not require the broader array of medical services that nursing facilities are required by law to provide. The Company has operations in Oregon, Washington, Idaho, Texas, Ohio, New Jersey and Arizona. The Company is currently developing and/or intends to acquire additional residences in Arizona, Indiana, New Jersey and other states. As of August 31, 1997, the Company had 98 operating residences and 41 residences under construction representing a combined total of 5,248 units.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Copies of the prospectus supplements relating to the offerings may be obtained from Schroder & Co. Inc., 787 Seventh Avenue, 5th Floor, New York, NY 10019, [phone].

CONTACT: Assisted Living Concepts, Inc.

William McBride III - [phone]

Keren Brown Wilson - [phone]