Acadia Healthcare CEO: ‘M&A Will Be a Focus for Us in 2024 and Beyond’

M&A is a critical strategic priority for Acadia Healthcare’s (Nasdaq: ACHC) CEO Chris Hunter.

M&A has always been part of the relatively new CEO’s plan to double the revenue of the Franklin, Tennessee-based behavioral health giant. However, he and other executives previously made it clear that adding new beds via de novo facility expansion, joint ventures with hospital systems and adding new beds to existing facilities would take priority.

“We’d like to be able to do more M&A,” Hunter said during an appearance at the Barclays 26th Annual Global Healthcare Conference. “It’s such a fragmented industry across service lines. We have been able to make it [through] redetermination across our lines in a rising interest rate environment. For small players, it’s been a challenging operating environment.


“I think we’re increasingly seen as an acquirer of choice, and we have a very robust pipeline across all of our lines of business. We will continue to see that M&A will be a focus for us in 2024 and beyond.”

Hunter and Acadia Healthcare CFO Heather Dixon, who also spoke, said the company’s balance sheet has the capital to spend or leverage into debt for M&A as well as other growth activities. The company uses M&A to get into desirable markets more quickly. The company’s other bed addition tactics require a fair bit of time to bring to life, according to Hunter

During the call, Hunter disclosed that Acadia Healthcare has acquired “two small CTCs in North Carolina within the last few weeks.” CTCs — a company acronym stands for comprehensive treatment centers — offer outpatient medication-assisted treatment (MAT) and other wrap-around health and social services.


After the call, company representatives told Behavioral Health Business Acadia Healthcare acquired Raleigh Methadone Treatment Center and Greenville Recovery Center. They have been rebranded to Raleigh Comprehensive Treatment Center and Greenville Comprehensive Treatment Center. These locations were previously part of outpatient addiction treatment provider Sellati & Co. Inc., which also operates in Virginia.

The company’s CTC count in North Carolina is now up to nine. At the end of 2023, Acadia Healthcare operated 10 facilities that encompassed 376 beds in the state, according to its annual financial disclosure for the year.

Acadia Healthcare generated 17% of its $2.9 billion in revenue from the CTC business line. Revenue from CTCs grew 19% in 2023 year-over-year. The company opened six new CTCs in 2023 and said in the 2023 annual financial disclosures that it plans to add 14 CTCs by the end of 2024, excluding acquisitions.

Despite producing the second-least amount of revenue among Acadia Healthcare’s divisions, CTCs makes up the bulk of its facility footprint. At the end of 2023, it operated 253 behavioral health care facilities with approximately 11,200 beds in 38 states and Puerto Rico. Of that, 157, or 62%, were CTCs. The company’s biggest money-maker is its acute inpatient psychiatric facility division, which drove 51% of revenues in 2023.

Acadia Healthcare’s CTCs each produce about $3.3 million a year on average with some regional variability, take a year to 18 months to break even and two to three years to reach their targeted profit margins, according to Dixon. She didn’t specify the margin target. 

Investments in these centers can continue after they reach the margin target.

“There is, at times, the opportunity to continue to add census to the facilities by adding some incremental labor because these facilities [have] very, very few cost patterns that impact them,” Dixon said. “It’s very different from an inpatient facility.”

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