Leerink Partners Remains Bullish on Acadia Healthcare (ACHC); CMA Extends Acquisition Assesment Deadline Through Nov
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Leerink Partners reiterated an Outperform rating and $80.00 price target on Acadia Healthcare (NASDAQ: ACHC) as the Competition & Markets Authority extends the assessment of the Priory acquisition through November. Leerink fully expects the deal to close in November.
Analyst Ana Gupte commented, "The UK Competition & Markets Authority (CMA) has extended the assessment of the Priory acquisition through November. CMA in its press release acknowledged that extension of assessment period does not materially increase the risk of an anti-competitive outcome from the merger and that there is a significant likelihood that it will be able to accept the undertaking before the end of the extended period. Our view has been the base case outcome given the sale of the 19 facilities has to be signed, sealed and delivered for ACHC (OP) to get the green light on the transaction. ACHC management indicated that they have interest from multiple buyers at attractive multiples and we fully expect the deal to close in November. Management also indicated that the proceeds of a few hundred million dollars would be redeployed toward acquisitions in the U.S., where there is a superior reimbursement environment. We reiterate our OP rating on ACHC at a PT of $80."
Shares of Acadia Healthcare closed at $50.32 yesterday.
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