S&P reviews Acadia

Standard & Poor's said it placed its ratings on Acadia Healthcare Co. Inc., including the B+ corporate credit rating and issue-level ratings, on CreditWatch with negative implications.

This follows the company's announcement that they entered into a definitive agreement to acquire specialty behavioral and substance abuse treatment provider CRC Health Corp. for $1,175,000,000. The acquisition will be financed through a combination of debt and equity issuance.

The agency expects the company to refinance all of CRC Health's existing debt with new debt and issue roughly $317 million of equity.

Proforma the transaction, S&P expects leverage to peak above 5 times. A meaningful departure from its expectation that debt to EBITDA would remain below 5 times as the company grows.

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