Acadia Healthcare (ACHC) Announces Possible Sale of UK Biz, Could Add $2 Per Share - Mizuho

Mizuho Securities analyst Ann Hynes reiterated a Neutral rating and $30.00 price target on Acadia Healthcare (NASDAQ: ACHC) confirmed the company is exploring strategic alternatives for its U.K. business including a potential sale. In October 2016, ACHC sold part of the acquired Priory business
to meet regulatory requirement for proceeds of $390mm at a multiple of 10.5x adjusted EBITDA after overhead allocation. The company used the majority of the sales proceeds to pay down debt at that time.

The analyst stated "We think the outcome (potential sale of the U.K. business) is not surprising and likely in-line with investors' expectations. If ACHC is able to sell the U.K. business, we estimate a pro-forma leverage of roughly 4.0x (versus current TMM/Adj. EBITDA of 5.6xE) depending on the amount of proceeds used for debt repayment". "Assuming ACHC successfully sells the U.K. business and estimating a 2019E proforma EBITDA of roughly $468mm would yield a price target of $30-$32".

For an analyst ratings summary and ratings history on Acadia Healthcare click here. For more ratings news on Acadia Healthcare click here.

Shares of Acadia Healthcare closed at $32.82 yesterday.

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