PHC announces acquisition of MeadowWood Behavioral Health

PHC, Inc., d/b/a Pioneer Behavioral Health (NYSE Amex: PHC), a leading provider of inpatient and outpatient behavioral health services, today announced that it has signed an agreement to acquire MeadowWood Behavioral Health, located in New Castle, Delaware, for $21.5 million, subject to customary purchase price adjustments. The transaction is expected to close late in the second quarter of 2011.  

The facility is a licensed acute care psychiatric hospital with 58 beds providing services on its 11-acre campus to adults suffering with mental illness and substance abuse. MeadowWood has both inpatient and partial hospitalization services focused on geriatric, co-occurring and acute mental disorders.

"This important acquisition will help accelerate our growth and improve our geographic penetration," commented Bruce A. Shear, Pioneer's president and CEO. "MeadowWood produced revenues of approximately $15 million for the 12-month period ended December 31, 2010, or approximately 30% of our fiscal 2010 full-year revenue. This acquisition is expected to be highly synergistic to PHC and in-line with our growth-related goals. Not only will the expansion into Delaware open a new market for our services, but the margins of this facility are strong due to MeadowWood's operating model, helping to improve the Company's margins after the acquisition is fully integrated into the PHC system. We expect this transaction to be accretive and to represent a future growth opportunity for our Company."

PHC anticipates seeking approval for additional beds to expand the facility during the next 12 months. PHC will retain the existing staff at MeadowWood under PHC management, which should improve efficiency by spreading more beds across the same operating leadership.

Mr. Shear continued, "We are excited to add the MeadowWood facility, its skilled and experienced health care team and a reputation for high quality care, to the PHC organization."

The anticipated acquisition is being made in connection with the divestiture requirements imposed on Universal Health Services following its acquisition of Psychiatric Solutions. The closing is contingent upon regulatory approval, including approval from the FTC and appropriate regulatory agencies of the State of Delaware, and other customary closing conditions.

PHC has received a commitment for the funding of up to $23.5 million of senior secured term debt and a $3.0 million senior secured revolving credit facility in connection with the acquisition from Jefferies Finance LLC, a division of Jefferies and Company Inc. Jefferies is a full service securities and investment banking firm serving companies and their investors globally.

SOURCE PHC, Inc., d/b/a Pioneer Behavioral Health