September 14, 2017

AdCare to be sold for $85M

Courtesy/AdCare
The AdCare Hospital in Worcester is among the company's locations that are being sold to American Addiction Centers.

A Tennessee-based addiction treatment practice with treatment centers throughout the country has acquired Worcester-based AdCare for $85 million.

AAC Holdings, which operates American Addiction Centers' (AAC) 20 locations throughout the country, announced the acquisition Wednesday afternoon.

The move accelerates the company's plan to diversify into MassHealth and Medicaid and expand its outpatient presence in New England.

AAC currently operates Clinical Services of Rhode Island's three locations in that state, but the company has no presence in the rest of New England.

AdCare operates nine locations in Massachusetts and Rhode Island, including hospitals in Worcester and North Kingstown, R.I.

AdCare has other outpatient facilities in Worcester, Springfield, Boston, Quincy and three others in Rhode Island. The Worcester company, according to the press release, has more than 6,000 hospital and residential admissions and over 115,000 outpatient visits each year.

The transactions is expected to close in the first half of 2018, subject to regulatory review and should be financed by an incremental loan under American Addiction Centers' secured loan facility, cash on hand and $5 million of the company's restricted common stock.

AdCare CEO David Hillis said the deal was reached after spending time with the company's leadership and visiting its treatment centers.

"By joining AAC, we will be in a better position to battle the opioid crisis and meet the treatment needs in the markets we serve," Hillis said.

Hillis is expected to join AAC's board of directors following the closing of the transaction.

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