Tenn. firm to buy Einstein behavioral health center

Einstein Healthcare Network has agreed to sell its Belmont Center for Comprehensive Treatment to Acadia Healthcare Co. for $35 million, Einstein announced Thursday.

The planned sale includes the Belmont Center, a 147-bed facility on Monument Road, plus a treatment facility in Northeast Philadelphia and an outpatient center for the elderly in Germantown.

Belmont behavioral-health facilities - treating psychiatric disorders and addictions, for example - employ 450, who are expected to be hired by Acadia, according to Einstein. The deal is expected to close in the next three to six months.

"After careful consideration, we have determined that this is the right course of action for our patients, employees, and the organization," said Barry R. Freedman, Einstein's chief executive officer.

Einstein will continue certain behavioral-health services that it operates under its own license. It has owned Belmont for about 30 years.

The nonprofit Einstein said it had no immediate plans to spend the proceeds of the sale, but would invest it to further the organization's charitable mission.

Belmont has had operating losses totaling $3.6 million in the last two fiscal years, according to Einstein's financial statements. Belmont's net patient revenue has fallen for two straight years, to $37.6 million in fiscal 2014 from a recent high of $41 million in fiscal 2012, the statements show.

Overall, Einstein had $1 billion in net patient revenue in the year ended June 30. Its total operating loss was $20.8 million, driven by losses at Einstein Physicians and at Einstein Medical Center Montgomery, which opened in East Norriton in September 2012 and was still ramping up last year.

Einstein also owns Einstein Medical Center Philadelphia in North Philadelphia, a small hospital in Elkins Park, and MossRehab, also in Elkins Park.

Belmont's buyer, Acadia, is a publicly traded company based in Franklin, Tenn. It has 76 behavioral-health treatment facilities in 24 states, Puerto Rico, and the United Kingdom, according to its website. The rapidly expanding company had $713 million in revenue last year.

The acquisition of Belmont brings Acadia into a new market - its closest facility is in New Castle, Del. - but is a small purchase for the company.

In July, Acadia spent $662 million for Partnerships in Care, which had 23 inpatient psychiatric facilities with more than 1,200 beds in the United Kingdom.

In October, Acadia agreed to buy CRC Health Group Inc. of Cupertino, Calif., for $318 million, plus the assumption of $875 million in debt.

Acadia has a larger rival in Universal Health Services Inc., a King of Prussia firm with 202 facilities in 36 states and overseas. In September, UHS paid $335 million for a British company with 18 facilities.

For-profit companies are attracted to the behavioral-health business because it is saddled with less uncompensated care than acute-care hospitals, has lower capital-investment requirements, and has relatively stable pricing.