AdCare Sold To Tennessee-Based Addiction Treatment Company

WORCESTER, MA—A Tennessee-based company that operates 20 American Addiction Centers around the country has reached an agreement to acquire AdCare for $85 million, the company announced in a statement. The centers are operated by AAC Holdings.

"Through this acquisition, AAC accelerates its longstanding plan to diversify into government pay, leverage an existing outpatient and business development presence in New England and continue the expansion of its hospital strategy," said the announcement.

AdCare was founded in 1986 and is considered a leading provider of addiction treatment in New England. According to its site, AdCare has nine locations in Massachusetts and Rhode Island, with one of its hospitals in Worcester. AdCare has had 6,000 hospital and residential admissions and more than 115,000 outpatient visits per year.

According to the statement, AdCare's facilities being acquired include a 114-bed hospital for substance abuse treatment including detoxification and rehabilitation services and five outpatient centers in Massachusetts and a 52-bed (46 currently licensed) residential treatment center and two outpatient centers in Rhode Island.

"AdCare's unique hospital setting allows the company to treat the most acute patients while offering step-down capability to longer residential care and outpatient services," said AAC Holdings' statement. "AdCare Criminal Justice Services ("ACJS") provides substance abuse treatment programs to inmates, criminal offenders not sentenced to jail or inmates following release from jail under contracts with state criminal justice agencies."

The purchase also includes the phone number 1-800-ALCOHOL, which is a nationally recognized referral phone line.

AdCare generated revenue of $51 million for the twelve months ended June 30, 2017, with Adjusted EBITDA of $8.5 million. AdCare's revenues during this period were approximately 59 percent related to Medicare reimbursement, 22 percent from in-network contracts and 19 percent from Medicaid reimbursement, said the announcement.

The transaction is expected to close during the first half of 2018.

Photo Credit: AdCare