American Addiction Centers` planned IPO fuels ongoing investment discussion

The addiction treatment industry's more prominent placement on the business pages in recent months was reinforced again this month with the announcement that American Addiction Centers has filed with the Securities and Exchange Commission (SEC) to raise up to $75 million in an initial public offering (IPO).

The announcement from the six-facility company, which focuses on treatment of co-occurring disorders and also has ventured into specialty areas such as compulsive overeating, is fueling a broader discussion about the financial health of the treatment field and the potential impact of investment activity on the effort to meet anticipated demand for services.

For its part, Brentwood, Tenn.-based American Addiction Centers is saying little thus far about its plans, beyond its intent to list on the New York Stock Exchange under AAC. The company initially filed its plans confidentially in May. A company spokesman did not reply to a request for comment from Addiction Professional this week.

High-profile treatment leader Michael Cartwright co-founded American Addiction Centers in 2004 and serves as its chairman. The company operates five adult facilities, in California, Florida, Nevada, Tennessee and Texas, and an adolescent facility in Florida. The FitRx center in the Nashville area addresses binge eating disorder and other eating issues with partial hospitalization and intensive outpatient services. Greenhouse in the Dallas area occupies the site of a former luxury spa and offers a variety of mind-body interventions in addition to its core behavioral health services.

Earlier this year, several former leaders at American Addiction Centers worked out another deal that created a buzz in the treatment community: a $3.8 million financing from Fulcrum Equity Partners that established Addiction Campuses, also based in Tennessee with the Spring2Life and Turning Point Recovery Centers as its initial properties.

Addiction Professional's March/April 2014 cover story outlined how the potential emergence of broader insurance payment for services under parity and the Affordable Care Act (ACA) is attracting keen interest from private investors, with the final implementing rule on parity serving as a major trigger for recent activity.

This wave of private investment also is resulting in soul-searching about how a traditionally mission-driven field will be affected by a greater presence of monied interests, as well as which facilities could flourish or perish as new players rush into the market.