Behavioral healthcare provider Psychiatric Solutions said it has been approached about a possible sale of the company. As a result, the Franklin, Tenn.-based company has formed a special committee of the board of directors to consider possible responses. Also, Psychiatric Solutions said it has retained Goldman, Sachs & Co. and Shearman & Sterling as its financial and legal advisers, respectively. The company did not name a potential suitor.
Psychiatric Solutions studies acquisition bid
“There can be no assurance that any transaction for a purchase of PSI will take place,” Psychiatric Solutions said in a news release. “PSI does not expect to make further public comments regarding these matters unless and until it enters into a definitive agreement with respect to a transaction or determines that none will be pursued.”
In a research note, B. Kemp Dolliver, managing director at Nashville-based Avondale Partners said the announcement of going private is “not entirely surprising,” and that Psychiatric Solutions is a logical fit in the portfolio for private equity firm Bain Capital. “Less widely reported is Bain's ownership of CRC Health Group, which operates residential treatment centers and competes with PSYS,” Dolliver wrote. “We think that it is entirely possible that Bain sees potential synergies between PSYS and CRC (or HCA).”
For the full year ended Dec. 31, 2009, Psychiatric Solutions reported total revenue of $1.81 billion and net income of $117.6 million compared with total revenue of about $1.7 billion and net income of $104.9 million for the same period in 2008.
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