Mental health operator Acadia (Nasdaq: ACHC) is further strengthening its position in the comprehensive treatment center (CTC) space with the acquisition of four new addiction care centers in Georgia. The deal, announced Tuesday, involves Brand New Start Treatment Centers and brings Acadia’s total network of sites offering medication assisted treatment (MAT) to 148 facilities across the United States. This expansion highlights the company’s commitment to increasing access to Georgia addiction treatment centers for patients in need.
This acquisition is a key part of Acadia’s broader strategy to expand access to behavioral health services and address the growing need for high-quality addiction care. With substance use disorder rates continuing to rise in the wake of the COVID-19 pandemic, the expansion of Georgia addiction treatment centers has become a critical priority for both public health and private providers. According to the CDC, drug overdose deaths increased nearly 30% from 2019 to 2020, with opioids involved in approximately 75% of fatalities.
Strategic Growth Through M&A, De Novos, and Joint Ventures
Acadia’s growth strategy combines mergers and acquisitions, de novo development, and joint ventures, giving the company flexibility in pursuing opportunities across different markets. During its Q3 earnings call, the company reported that it remains on track to add 600 beds by the end of 2022, a goal that underscores its commitment to expanding treatment capacity nationwide.
Chris Hunter, CEO of Acadia, explained the company’s strategic approach during a fireside chat with Credit Suisse. “We feel like we were able to pay a very fair price and, at the end of the day, grow the business,” he said. “I do think it’s illustrative of our ability to look at a market and say sometimes it makes sense for us to do a de novo, sometimes it makes sense for us to partner on a JV front, if it’s an inpatient facility. Other times, it makes sense for us to do M&A, and we’re constantly balancing that equation.”
By pursuing a mix of strategies, Acadia can tailor its growth approach to the specific opportunities and dynamics of each local market. In Georgia, acquiring Brand New Start Treatment Centers allowed the company to enter the state quickly with an established operator rather than building new Georgia addiction treatment centers from scratch.
Why Georgia? A Growing Market for Addiction Treatment
Acadia had a limited footprint in Georgia prior to this acquisition, but the company recognized the state as a high-potential market. By purchasing an existing operator, Acadia gains immediate access to patients, experienced staff, and operational infrastructure, positioning the company for faster growth than a de novo development would allow.
David Duckworth, CFO at Acadia, emphasized the potential for smaller acquisitions to complement the company’s de novo strategy. “So we’re excited to have more scale in that market,” he said during the Credit Suisse event. “There are some larger players in the industry, and there can be a variety of valuation multiples that we see across the industry. But for a smaller tuck-in, of which there are, we think more, that could be attractive. It’s a great opportunity to overlay the de novo opportunity we are continuing to pursue.”
Acadia’s Comprehensive Behavioral Health Network
Founded in 2005 and headquartered in Franklin, Tennessee, Acadia operates 239 behavioral health facilities with 10,600 beds across 39 states. Its network includes inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers, outpatient clinics, and therapeutic school-based programs. The addition of Brand New Start Treatment Centers reinforces the company’s position as one of the largest behavioral health providers in the country, particularly in the rapidly growing CTC segment. By expanding its Georgia addiction treatment centers, Acadia is providing new options for patients seeking MAT and other addiction services.
The acquisition also reflects Acadia’s ongoing commitment to expanding access to medication assisted treatment, which has become a cornerstone of modern addiction care. MAT combines behavioral therapy with FDA-approved medications to treat substance use disorders, particularly opioid use disorder, and has been shown to improve recovery outcomes and reduce overdose risk.
Responding to the Opioid Crisis and Public Funding Opportunities
The expansion of CTCs is occurring amid a surge in demand for addiction treatment, fueled by the opioid crisis and increased awareness of substance use disorders. Federal, state, and municipal governments are increasingly allocating settlement funds from opioid litigation to establish or expand Georgia addiction treatment centers, providing additional growth opportunities for providers like Acadia.
Hunter noted that Acadia has already been approached by a county interested in establishing an opioid use disorder clinic with settlement funding. “I think there’s some opportunity just given our scale, that counties know that we have a broad range of services, and they’re looking to us to advise them and to help them as they are trying to put dollars to work,” he said. “There are so many different ways that the settlement dollars can be used, but it’s primarily around treatment and access to care.”
Looking Ahead: Acadia’s CTC Growth Plan
Acadia’s acquisition of Brand New Start Treatment Centers is part of a broader push to expand its CTC business. In Q3, the company opened two new CTCs and is on track to open six by the end of 2022. Smaller acquisitions like this may become an increasingly important component of the company’s growth strategy, allowing Acadia to scale efficiently in key markets while continuing to pursue de novo development opportunities.
As the need for comprehensive addiction treatment continues to grow, Acadia’s strategic expansion positions the company to meet demand, leverage public and private funding opportunities, and provide high-quality care to more patients across the country. Its focus on expanding Georgia addiction treatment centers highlights both the company’s commitment to the state and the broader national effort to combat substance use disorders.
By combining M&A, de novo development, joint ventures, and a focus on MAT services, Acadia is creating a robust, scalable network of treatment centers designed to address one of the nation’s most pressing public health challenges.
