AAC Buys South Florida's Recovery First

Addiction Treatment Industry Newswire

12/18/2014 -ATIN – American Addiction Centers (NYSE: AAC) the company addiction entrepreneur Michael Cartwright just took public in a highly successful deal, and whose stock has been flying higher ever since its IPO launch in the early fall, has bought South Florida’s Recovery First, a center whose CEO Jim Davis has reputedly been shopping for some time.

$13M in Cash

AAC paid $13M in cash for a center that gets most of its business from in-network arrangements, and thus likely has highly reliable cash flows with relatively low marketing costs. According to a press release- AAC CEO Michael Cartwright was not immediately available for comment – the deal is supposed to close in the first quarter. Recovery First has 56 beds that include 20 detox beds, according to a press release on the Nasdaq site, that generate $7.3M in revenue and cash flow (EBITDA) of about $2.3M on an annualized basis based on the 9-mo period ending in September. Thus, Cartwright paid approximately 5.6x cash flow for Recovery First.

Stock Doubled

American Addiction Center’s stock closed near $30 today, approximately double its IPO offering price of $15 on a day the Dow Jones industrial Average soared over 400 points in its best single day gain in 3 years.

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