October 18, 2018 / 12:11 PM / a month ago

Exclusive: Acadia Healthcare in talks with private equity firms - sources

(Reuters) - Acadia Healthcare Co Inc (ACHC.O), a U.S. operator of behavioral health centers, is in talks with private equity firms about selling itself after attracting buyout interest, people familiar with the matter said on Thursday.

The buyout talks involving Acadia underscore the renewed interest by private equity firms in the sector, following U.S. legislative reforms that expanded insurance coverage for behavioral health and substance abuse treatment.

KKR & Co Inc (KKR.N) and TPG Global are among the private equity firms that have approached Acadia recently to express interest in acquiring it, the sources said, cautioning there is no certainty of a deal.

The sources asked not to be identified because the matter is confidential. Acadia could not be reached immediately for comment, while KKR and TPG declined to comment.

Acadia shares rose 10 percent to $39.49 in morning trading in New York on Thursday, giving the company a market capitalization of about $3.4 billion.

Based in Franklin, Tennessee, Acadia offers behavioral health and addiction services to patients in psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

The company operated a network of 585 behavioral healthcare facilities with approximately 17,900 beds in 40 U.S. states, Britain and Puerto Rico, at the end of June.

Acadia has been snapping up smaller peers as it seeks to consolidate a fragmented industry. Among its acquisitions in the last few years are CRC Health Group Inc in the United States and Priory Group in Britain.

KKR recently completed a major deal in the healthcare services sector, acquiring Envision Healthcare Corp, one of biggest U.S. providers of physicians to hospitals, for $5.6 billion last week.

P2 Capital Partners LLC, an investment firm that has taken positions in other companies that ended up selling themselves to private equity firms, including Blackhawk Network and Mitel Networks, had a 2.6 percent stake in Acadia as of the end of June, according to Refinitiv data.

Reporting by Greg Roumeliotis and Joshua Franklin in New York; Additional reporting by Carl O'Donnell in San Francisco and Pamela Barbaglia in London; Editing by Jeffrey Benkoe and Susan Thomas

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