Christopher Hunter

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.”

Originally published at https://bhbusiness.com on March 15, 2024.

FRANKLIN, Tenn. — () — Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced that its Board of Directors has named Christopher Hunter as the Company’s new Chief Executive Officer. He will join Acadia on April 11, 2022 and will serve on the Company’s Board of Directors. Hunter brings an array of executive and healthcare experience from prior senior leadership roles at Humana, TriZetto and BlueCross BlueShield of Tennessee. He replaces Debbie Osteen, who became the Company’s Chief Executive Officer in 2018 and oversaw more than three years of successful growth. Osteen has entered into a consulting agreement to assist with the transition and will remain on Acadia’s Board of Directors.

“The Board conducted a thorough and highly selective process to find a Chief Executive Officer who would complement our existing executive team and build on our strong foundation,” said Reeve B. Waud, Chairman of Acadia’s Board of Directors. “Chris brings the right combination of skills and expertise to lead Acadia as we continue to extend our market reach to meet the behavioral health needs of millions of Americans. His proven track record of leadership and innovative growth within the healthcare industry will ensure that we continue to execute our strategic growth plan with favorable results. At the same time, Chris believes in our objective to remain a patient-first organization focused on quality of care and an employer of choice delivering strong returns for our stockholders over the long term. Chris has the complete confidence of the Board, and we are fortunate to also have the support of a committed executive management team. Together, we look forward to the opportunities ahead for Acadia as we advance our position as a leading behavioral healthcare provider.

“We greatly appreciate Debbie’s important contributions to Acadia’s growth and success, and we are confident this will be a smooth transition of leadership. We are pleased to have Debbie remain on the Company’s Board as we continue to benefit from her expertise and valuable insight,” added Waud.

Hunter joins Acadia’s experienced and proven leadership team, bringing more than 20 years of healthcare experience and expertise across a range of sectors, multiple technology-focused companies, as well as the investment banking industry. Most recently, he served as President of Humana’s Group, Military & Specialty Segment, where he oversaw three distinct business units, totaling approximately $7 billion in revenue and serving 20 million members across 45 states. He also served as Humana’s Chief Strategy Officer with responsibility for all corporate strategy, merger and acquisitions and partnership activities.

“This is an incredible honor, and I am excited to join such a strong, respected organization that is addressing a critical societal need at a pivotal time for our country,” said Hunter. “With a growing patient base and an industry-leading executive team already in place, I’m looking forward to building on the successful trajectory set by Debbie and the leadership team. I am proud to work with Acadia’s committed facility leaders and 22,500 dedicated employees across the country with a shared mission to provide high-quality behavioral healthcare services to existing and new communities.”

Hunter received his bachelor’s degree with highest honors from the University of North Carolina at Chapel Hill and an M.B.A. from the Harvard Business School. His recent board experience includes AfterNext HealthTech (NYSE: AFTR), Availity, Youth Villages and the UNC-Chapel Hill Honors Program.

About Acadia Healthcare

Acadia is a leading provider of behavioral healthcare services across the United States. As of December 31, 2021, Acadia operated a network of 238 behavioral healthcare facilities with approximately 10,500 beds in 40 states and Puerto Rico. With more than 22,500 employees serving approximately 70,000 patients daily, Acadia is the largest stand-alone behavioral health company in the U.S. Acadia provides behavioral healthcare services to its patients in a variety of settings, including inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

Originally published at https://www.businesswire.com on April 1, 2022.