AAC Holdings (NYSE: AAC), one of the leading US services providing addiction treatment, announced on Thursday, June 16, that it will get larger. This comes as the Department of Public Health of California has issued a license for Laguna Treatment Hospital, LLC, an AAC’s indirect subsidiary, to run a new 93-bed Chemical Dependency Recovery Hospital in Aliso Viejo.
The Laguna Treatment Hospital was purchased by AAC in 2015 for a total of $13.5 million. Until that point, the hospital had provided memory care solutions. AAC Holdings spent over $5 million for renovations.
Michael Cartwright, Chairman and CEO of AAC Holdings, said: “We are pleased to once again work with the State of California to license one of our facilities and to be able to open this hospital on the timeline we projected over a year ago”. He added that: “Laguna Treatment Hospital fills a unique and rapidly expanding need for detoxification beds in the United States and particularly in California. With very few licensed Chemical Dependency Recovery Hospitals in the state, we expect this hospital to not only serve our existing 180 beds in San Diego and Temecula but to also provide high acuity detox services for the estimated 900 treatment clinics and centers in Southern California.”
AAC Holdings And Addiction In The US
AAC Holding, the short brand name of American Addiction Centers, is a growing company providing treatment options for people who struggle with different kinds of addictions, particularly alcohol and drug addiction. Together with Acadia Healthcare (NASDAQ: ACHC), it leads the US industry of alcohol and drug addiction rehabilitation, which generates $35 billion annually.
According to the National Institute of Drug Abuse, the excessive use of tobacco, alcohol, and drugs costs the US economy over $700 billion annually, in costs related to crime, poor work productivity, and health care. The sad truth is that only 10% to 20% of all the addiction sufferers in the US apply for treatment help.
Each case of addiction is a story apart, the problem starting to get more and more attention in the recent decade. People have to become conscious of their problem and go for a help, because they cannot fight addiction on their own. The public has to get educated on this issue.
Wickstrom, Founder of Best Drug Rehabilitation, remarked: “The obstacles that young people face seem insurmountable. But no matter how bad it gets, no matter what mistakes you’ve made in the past, and no matter how old you are, you can overcome anything, become successful, and lead a respectable, healthy life. I say this because I overcame my battles with addiction, a battle that raged for more than 22 years. After winning my battle, I now run one of the largest holistic rehabilitation centers in the United States and help thousands of people every year beat their addiction and start a new promising life.”
AAC Holdings and other companies in the area not only try to provide quality services and expand their business, but try to educate people through different programs.
AAC Holdings – Past and Future
AAC Holdings has expanded after a series of acquisitions over the years.
In May 2016, AAC purchased Solutions Recovery, Inc. for $6.75 million in cash and $6.25 million if restricted shares of AAC Holdings’ common stock. The deal added the following: 100 Sober Living Beds (owned); 80 Licensed In-Network Detox, Residential and Halfway House Beds (leased); 24 Sober Living Beds (leased); and 2 Licensed, In-Network Outpatient Centers (leased).
In April 2016, AAC acquired Wetsman Forensic Medicine, LLC (d/b/a Townsend) and its affiliates for $13.5 million in cash and $8.5 million in restricted shares of AAC Holdings’ common stock.
In the same month, AAC, via one of its subsidiaries, acquired a 100-room hotel in Arlington, Texas for $5.35 million and plans to transform it into sober living beds.
In 2015, it acquired Sunrise House Foundation, Inc. for $6.6 million; The Oxford Centre, Inc. and its affiliates for $35.0 million; Referral Solutions Group, LLC and Taj Media, LLC for $60 million; and an 84-licensed-bed hospital in Laguna Beach, California for a total of $13.5 million in cash.
Today, AAC Holdings is regarded as a national leader in the addiction rehab industry. Its share price is $19.92, not far away from the share price when AAC was introduced in the NYSE stock list. Its peak was at $46.60 in July 2015.
At the moment, it seems the AAC’s share price is in decline, and it does not make sense to swing trade by opening long positions. However, in the long term, the company has a solid future, and it goes larger and larger. Whenever there will be fundamental support, the price may search for the $25.00 level again. So, keep an eye on AAC Holdings!
[Image Courtesy of Wikipedia]