One of the psychiatric hospital industry's most acquisitive companies has itself been gobbled up by its biggest competitor.
Atlanta-based Charter Behavioral Health Systems last week agreed to buy Behavioral Healthcare Corp. from Vencor and other private investors for more than $200 million.
Louisville, Ky.-based Vencor, which owns 61% of Behavioral, said it will receive $140 million in cash from the sale. The other 39% of Behavioral's shares are privately held by various institutional investors, who didn't disclose their financial terms.
Charter, which is acquiring all outstanding shares of Behavioral, wouldn't disclose the price of the aquisition, but based on Vencor's stake and proceeds the total value appears to be about $230 million.
Behavioral, based in Nashville, showed the most acquisition activity among psychiatric hospital chains last year, according to MODERN HEALTHCARE's 1996 Multi-unit Providers Survey. Behavioral ended 1996 with 42 hospitals, compared with nine in 1995. It now operates 47 mental health facilities.
Vencor, a long-term-care company, picked up its 61% ownership stake in Behavioral in June when it acquired Las Vegas-based Transitional Hospitals Corp., formerly called Community Psychiatric Centers. It said it will use the proceeds of the sale to pay off debt.
CPC had acquired 61% of Behavioral's stock as part of its agreement to sell 25 of its psychiatric hospitals to Behavioral last year.
Charter, which is operated as a joint venture by Atlanta-based Magellan Health Services and Fort Worth, Texas-based Crescent Real Estate Equities, is the nation's largest psychiatric hospital chain.
Charter said it plans to merge Behavioral into one of its subsidiaries. The combined company will operate 139 mental health facilities in 36 states and Puerto Rico with $1.2 billion in revenues.