“We are thrilled to announce the closing of our acquisition of AdCare, which furthers our long-term strategy of diversifying our payor, region and treatment types,” said Michael Cartwright, Chairman and Chief Executive Officer of AAC Holdings. “We look forward to adding AdCare’s seasoned management team and dedicated employees to the AAC family and expanding our footprint in the Northeast, in order to build upon AdCare’s over 30 years of exceptional clinical care and change the lives of those who seek our help.”
AdCare, founded in 1986, is one of the leading providers of addiction treatment in New England with approximately 8,000 hospital and residential admissions and over 116,000 outpatient visits per year. AdCare’s facilities include a 114-bed hospital for substance abuse treatment, including detoxification and rehabilitation services, and five outpatient centers in Massachusetts and a 59-bed residential treatment center and two outpatient centers in Rhode Island. The acquisition also includes the purchase of 1-800-ALCOHOL™, a nationally recognized referral phone line, and other toll-free numbers that together generate approximately 50,000 calls per year.
David Hillis, Sr., Chief Executive Officer and Chairman of the Board of AdCare added, “Our leadership team and talented employees are very happy to be joining the team at AAC, which shares the same commitment to clinical excellence as AdCare and is the ideal partner to build upon the AdCare legacy. The opioid crisis in the Northeast continues to worsen, and there is an increasing need to deliver best in class treatment in in a variety of locations, types of treatments and payors. AAC’s national reputation and financial and operational strength will allow our team to extend the number of patients we can serve.”
AdCare generated revenue, before the provision for bad debts, of $54 million and net income of $10 million for the twelve months ended September 30, 2017.
In connection with the acquisition of AdCare, AAC closed on the $65 million incremental term loan arranged by Credit Suisse Securities (USA) LLC, Deutsche Bank Securities, BMO Capital Markets Corp. and Whitney Bank (d/b/a Hancock Bank).