|Addiction Treatment Industry Newswire
|02/12/2015 -ATIN – American Addiction Centers, after last month acquiring a new headquarters building in Brentwood, TN where the newly public company is based, has used a combination of cash and its stock to acquire a Rhode Island chain of outpatient facilities, paying 6x adjusted cash flow (EBITDA) through a subsidiary company that was likely set up purposely to make the acquisition of Clinical Services of Rhode Island, CSRI. American Addiction Centers (NYSE: AAC) is paying a combination of $665K in cash and $1,335M of its so far well performing stock after signing a definitive agreement to acquire the chain of intensive outpatient clinics in the small northeastern state. In interviews with Treatment Magazine, AAC CEO and founder Michael Cartwright has made clear his desire to expand AAC’s outpatient capacity in order to provide his clients at his fast growing nationwide addiction treatment enterprise full “continuum of care” options, either “stepping down” from of one his residential centers in the half dozen states or so where AAC has this level of care or simply having the capability of providing Rhode Islanders the ability to begin their treatment at the outpatient level if that is all the client can afford or evaluations indicate that is an appropriate level for the client to begin their treatment.
CSRI Founders Joining ACC
Press materials provided by AAC regarding the founders and top executives at CSRI, which has three locations in the tiny state; say that the co-founders would join the ranks of AAC executive talent, with CSRI co-founder Mr. Reinhard Straub taking on a top business development and clinical liaison role at AAC and co-founder Peter Letendre remaining as CEO and clinical director of AAC’s new Rhode Island operations. In a short conversation yesterday afternoon with Treatment Magazine, AAC CEO and founder Cartwright said he remains highly interested in acquiring a Manhattan outpatient operation in a deal which has been basically worked out, but Cartwright said yesterday afternoon that what is holding up getting that deal done is the slow process around getting regulatory approvals from the New York state regulator OASAS.
Strong Investment Interest in Northeast Outpatient Ops
AAC isn’t by any means the only top treatment operator to have shown interest in acquiring outpatient operations in the Northeast, with acquisitive Elements Behavioral purchasing Park Bench Group Counseling, a new operation founded in 2006 in Southeastern New Jersey. Jennifer Gallagher, who has been in charge of targeting and identifying potential acquisition targets for Elements for just under two years now as the company’s chief development officer, negotiated the deal for Elements, helping announce the purchase in very late 2014. At the time of the deal’s announcement, in a long interview with Treatment Magazine, Ms. Gallagher emphasized, as Elements does primarily with its acquisitions as it views a good fit culturally with the company’s extremely high clinical standards, or an ability to raise the acquisition target to Elements’ standards, as the paramount factor in determining whether Elements makes an offer for a center, that she was very highly impressed with the good potential fit in this respect between Park Bench and Elements. Since joining Elements Ms. Gallagher has negotiated the acquisitions of Utah and Arizona’s Journey Healing Centers, COPAC of Jackson, MS, Eastern Pennsylvania’s Clarity Way and most recently, of course, the Park Bench Counseling deal.
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