Acadia Healthcare has once again reached across the pond to pick up some new assets.
The Franklin, Tenn.-based behavioral health provider on Monday announced it will acquire Priory Group for $2.2 billion and will also pay off some of the British healthcare group's debt, making the deal worth $3.6 billion. Healthcare reform in England is opening the door for the private sector, experts say.
Priory considers itself the leading behavioral healthcare provider in the U.K., operating more than 300 behavioral health facilities with about 7,200 beds. Acadia currently operates 54 inpatient facilities in the British Isles, with a bed count of 2,200.
“We look forward to welcoming Priory's outstanding team to Acadia and to building on a sector leadership position that reflects Priory's clinical expertise, strong operations and high-quality facilities,” Joey Jacobs, Acadia's chairman and CEO, said in a press release.
Priory is expected to report $865 million in revenue for 2015, according to a press release. Acadia generated an estimated $352.5 million of revenue in the U.K. last year.
In its quarterly financial earnings statement for the period ended Sept. 30, Acadia reported revenue of $479.7 million, a 62% bump over the prior year period. The company's stock was trading at $64.60 per share Monday afternoon, up 3.43%. The deal is expected to close by Feb. 16.
Acadia has been scooping up British providers as of late. This past June, Acadia bought the operations of Care UK, composed of 15 inpatient facilities with about 300 beds. It also acquired Choice Lifestyles, a 42-bed inpatient facility.
And in June 2014, the publicly traded Acadia priced a stock offering to help finance its $660 million purchase of Partnerships in Care, the second-largest independent inpatient behavioral health services provider in the U.K.
The British Isles have become a hotbed of merger and acquisition activity for U.S. healthcare providers, experts say, especially in Great Britain. The Health and Social Care Act in 2012 allowed for more outsourcing of patient treatment, which opened the door to the private sector, said Ana Gupte, senior analyst and managing director of healthcare services at Leerink Partners, a New York-based investment bank.
Other U.S. providers are recognizing the potential for growth in the U.K.
In September 2014, Universal Health Services, a King of Prussia, Pa.-based for-profit behavioral health and acute-care provider, bought London-based Cygnet Health Care for $335 million. And it's not just systems looking abroad.
Late last year, U.S. drug giant Pfizer announced it would merge with rival Dublin-based Allergan, creating the world's biggest pharmaceutical company by sales. The $160 billion deal was blasted by politicians and pundits who said it was an example of corporate inversion, where a U.S. company shifts its business overseas to lower its corporate taxes.