Acadia Healthcare has hinted it will take a fresh approach to its UK business, Priory Group, after ousting CEO and chairman Joey Jacobs.
Jacobs, who joined the company in 2011 after selling Psychiatric Solutions Inc, was removed by Acadia’s Board over the weekend and replaced with Debbie Osteen, former president of the Behavioral Health Division of Universal Health Services (UHS), which owns Cygnet Health Care in the UK. Reeve B Waud, who leads Acadia’s Board, has been elected chairman.
The news comes just weeks after reports that a potential take-over bid by private equity firm KKR had collapsed.
Osteen stepped down from her role at UHS on 6 December. She had headed up the group’s Behavioral Health Division since 1999 and is credited with building it into the largest psychiatric provider in the US, taking it from 23 to over 300 facilities during her 20-year tenure.
Waud said it was the right time for a change of leadership as Acadia looked to accelerate momentum and drive value creation.
‘[Osteen’s] experience leading UHS’ Behavioral Health Division over nearly two decades where she was responsible for its growth and operational success across both the US and the UK makes her a perfect fit for Acadia,’ he said. ‘The Board is confident [she] will help Acadia build on its position as a premier pure-play behavioral health services provider and we look forward to her taking the company to the next level.’
Acadia has not detailed its plans for the UK business, but in a statement, Osteen said: ‘Acadia has a strong platform and an ambitious plan to continue adding beds and expanding its geographical footprint, while taking a new approach to the recently acquired UK business. I look forward to working with Acadia’s talented employees to take the company forward to another level.’
Acadia entered the UK market in 2014 after buying Partnerships in Care for £394m. It expanded its UK footprint with the acquisition of Priory Group for £1.5bn in 2016. But the journey has not been a smooth one. Unlike competitor UHS, the company did not manage to fend off intervention by the Competition and Markets Authority and was forced to divest 22 facilities in 2016.
On top of that, high agency staff costs and lower than anticipated bed occupancy have continued to erode Priory’s margins, putting a drag on Acadia’s earnings and prompting it to revise its guidance in Q2. Although Acadia has maintained it remains committed to the UK market, it said in November that it was looking to close or sell an unspecified number of underperforming Priory sites.