Acadia closes expanded $400 million term loan, revolver for buyout

By Susanna Moon

Chicago, Jan. 2 - Acadia Healthcare Co., Inc. said it expanded and extended its senior secured credit facility, which now consists of a $300 million term loan and a $100 million revolving credit facility, to fund acquisitions.

Interest on the loans was reduced by 100 basis points to Libor plus 325 basis points, with a spread of 275 bps to 350 bps based on leverage.

The term loan was upsized from $150 million, and the revolver was upsized from $75 million.

The loans will now mature Dec. 31, 2017.

The company amended its credit agreement on Monday with Bank of America Merrill Lynch and Fifth Third Bank as the lead arrangers and book managers, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is administrative agent, swing line lender and letter-of-credit issuer, with Fifth Third Bank as syndication agent.

Acadia said it used $151 million of the term loan to help fund the acquisition of Behavioral Centers of America, LLC and AmiCare Behavioral Centers, which also closed Monday.

Acadia did not tap the revolving line of credit to fund the acquisitions, and, as of Dec. 31, there was $100 million available under the revolver.

"We are very pleased to have closed 2012 with two significant acquisitions, which together bring eight inpatient psychiatric facilities and over 600 licensed inpatient beds to Acadia," Brent Turner, president of Acadia, said in a company press release.

"In addition, our amended credit facility and equity financing position us well to continue implementing our acquisition strategy in 2013."

More details

The amended term loan requires quarterly principal payments of $1.875 million for March 31 to Dec. 31, 2013, $3.75 million for March 31, 2014 to March 31, 2014, $5.625 million for March 31, 2015 to Dec. 31, 2015, $7.5 million for March 31, 2016 to Dec. 31, 2016 and $9.375 million for March 31, 2016 to Sept. 30, 2016, with the remaining principal balance due at maturity.

The credit agreement also provides for a $50 million incremental credit facility.

The company also used proceeds of $173 million from a sale of common stock to fund the acquisitions.

Borrowings under the facility are guaranteed by each of Acadia's domestic subsidiaries other than the Pavilion at HealthPark, LLC and are secured by a lien on substantially all of the assets of Acadia and its domestic subsidiaries other than the Pavilion at HealthPark.

As of Monday, interest was 3.5% and the unused fee was 50 bps.

Covenant terms

The company must maintain a fixed charge coverage ratio of at least 1.25 times beginning with the fiscal quarter ending March 31.

The consolidated leverage ratio may not be more than 5.25 times for the first three quarters of 2013 ending Sept. 30, 2013, stepping down to 5 times for the quarter ending Dec. 31, 2013, to 4.75 times for the first three quarters of 2014 ending Sept. 30, 2014, then to 4.5 times for the next four quarters ending on Sept. 30, 2015 and finally to 4 times after that until maturity.

The senior secured leverage ratio may be no more than 3.5 times for the first three quarters of 2013 ending Sept. 30, 2013, stepping down to 3.25 times for the next four quarters ending Sept. 30, 2014 and then to 3 times after that until maturity.

As of Monday, Acadia said it was in compliance with those covenants.

Acadia is a Franklin, Tenn.-based provider of inpatient behavioral health-care services.

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