AAC Holdings, Inc. Executes Growth Strategy with Agreement to Acquire In-Network Substance Abuse Treatment Facility in New Jersey for $6.6M

On Mar 30, 2015

American Addiction Centers, Inc., a subsidiary of AAC Holdings, Inc., signed a definitive agreement to acquire the operating assets of Sunrise House Foundation, Inc., a New Jersey nonprofit corporation, with an existing 110-bed, 87,000 square-foot substance abuse treatment center in Lafayette, New Jersey, for $6.6 million in cash and the assumption of up to $0.5 million of certain liabilities. The closing is expected to occur during the third quarter of 2015 and is subject to certain closing conditions, including the receipt of governmental approvals and licenses necessary to operate the business and the assignment of certain contracts.

Founded in 1983 and located on 22 acres in Western New Jersey that was once a Franciscan monastery, Sunrise House Foundation, Inc. is a non-profit, in-network provider of substance abuse treatment with 110 inpatient beds, including 92 rehab beds and 18 detox beds on the main campus in Lafayette; a total of 30 halfway house beds in Franklin and Plainfield; and 2 outpatient treatment programs located in Lafayette and Mountainside. AAC expects to invest approximately $5 million in renovations of the campus over the 12 months following closing. The Company expects the facility to be Adjusted EBITDA neutral until the renovations are completed. Current Sunrise CEO Philip Horowitz, Ph.D. will continue to oversee the facility operations following the closing.

Michael Cartwright, Chairman and Chief Executive Officer of AAC Holdings, noted, “Sunrise House has run an effective 12-Step program for over 30 years with extensive clinical outcome studies and significant in-network and trade union contracts. We look forward to improving the campus setting and facilities and continuing their original vision and passion for treating addiction. The addition of in-network inpatient beds and the outpatient centers will complement the other facilities we are adding in the region and increase our presence in one of our larger referral bases.”

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