-ATIN- 06/07/08 – CRC’S Youth Division, comprised mostly of the assets of the former Aspen Education Group, which CRC acquired in 2006 for about $290 million from a group of private equity owners, swung to a $220,000 operating loss in the first quarter from an operating profit of nearly $1.3 million in the corresponding period a year earlier, according to SEC filings.
CRC had hoped to find substantial operating synergies between its existing stable of treatment assets and the newly acquired Aspen Education, according to former Aspen Education executives. Some of these executives stayed on with CRC for about a year after the acquisition, and some are now no longer with the company. One former Aspen Education exec said that he was unimpressed with how CRC handled the transition, and, in his opinion, CRC may have squandered significant opportunities as a result.
Aspen Education was a pioneering consolidation agent and new treatment property developer within the therapeutic schools/wilderness programs marketplace, which in recent years has emerged as a $2 billion a year business that has probably been the fastest growing specialty sector of behavioral healthcare. From its beginings in the early 1990s as the youth division of California-based College Health Enterprises, and after the division was acquired by private equity house Frazier Healthcare Ventures, Aspen Education grew to be the largest therapeutic schools operator in the country.