Acadia Healthcare to buy UK's Partnerships in Care for $660 million
(Reuters) - Acadia Healthcare Co Inc, an operator of psychiatric and substance-abuse clinics in the United States, said it would buy Partnerships in Care (PiC) for about $660 million to enter the UK's growing non-government behavioral health care market.
The market for such care has been growing at 9.2 percent annually since 2004, largely due to a decline in National Health Service funding for government clinics, Acadia said on Tuesday.
Private operators control about 8 percent of the $25 billion market, the company said.
Acadia's shares rose as much as 15 percent on the Nasdaq on Tuesday.
PiC, the second largest independent provider of inpatient behavioral healthcare services in the UK, had revenue of about $285 million in 2013. Almost all of its reimbursements come from the NHS, Wells Fargo analyst Gary Lieberman wrote in a note.
NHS has maintained its reimbursement policies even as it cut back on other spending.
Privately owned PiC operates 23 inpatient psychiatric clinics with more than 1,200 beds.
"The deal would appear to be a good one for Acadia assuming a reasonably stable reimbursement environment," Lieberman said.
Acadia, which is based in Franklin, Tennessee, said the deal would add 17-20 cents per share to its earnings in 2014 and 40-46 cents per share in 2015.
The company forecast 2014 earnings of $1.26-$1.29 per share in April.
Acadia operated 51 behavioral healthcare clinics with 4,200 beds in 23 U.S. states and Puerto Rico as of Dec. 31.
The company said it had received a commitment from Bank of America Merrill Lynch to fund the deal, which is expected to close on July 1.
Acadia's shares were up about 14 percent at $47.91 in afternoon trading. The stock had risen about 44 percent in the year to Monday's close.
(Editing by Kirti Pandey and Joyjeet Das)