Bond Arcadia Health Group Inc. 5.125% ( US00404AAG40 ) in USD

Issuer Arcadia Health Group Inc.
Market price 100 %  ▼ 
Country  United States
ISIN code  US00404AAG40 ( in USD )
Interest rate 5.125% per year ( payment 2 times a year)
Maturity 30/06/2022 - Bond has expired



Prospectus brochure of the bond Acadia Healthcare Co. Inc US00404AAG40 in USD 5.125%, expired


Minimal amount 2 000 USD
Total amount 300 000 000 USD
Cusip 00404AAG4
Standard & Poor's ( S&P ) rating N/A
Moody's rating N/A
Detailed description Acadia Healthcare Company, Inc. is a leading provider of behavioral healthcare services offering inpatient and outpatient treatment for individuals with mental health and addiction disorders across the United States and the United Kingdom.

The Bond issued by Arcadia Health Group Inc. ( United States ) , in USD, with the ISIN code US00404AAG40, pays a coupon of 5.125% per year.
The coupons are paid 2 times per year and the Bond maturity is 30/06/2022







Form 424(b)(3)
424B3 1 d771930d424b3.htm FORM 424(B)(3)
Table of Contents
Filed Pursuant to Rule 424(b)(3)
Registration Number 333-198004
Prospectus
$300,000,000

ACADIA HEALTHCARE COMPANY, INC.
EXCHANGE OFFER FOR
5.125% SENIOR NOTES DUE 2022
Offer (which we refer to as the "Exchange Offer") for outstanding 5.125% Senior Notes due 2022, in the aggregate principal amount of
$300,000,000 (which we refer to as the "Outstanding Notes"), in exchange for up to $300,000,000 in aggregate principal amount of 5.125% Senior
Notes due 2022 which have been registered under the Securities Act of 1933, as amended (which we refer to as the "Exchange Notes" and,
together with the Outstanding Notes, the "notes").
Material Terms of the Exchange Offer:


· Expires 5:00 p.m., New York City time, on September 19, 2014, unless extended.


· You may withdraw tendered Outstanding Notes any time before the expiration of the Exchange Offer.

· Not subject to any condition other than that the Exchange Offer does not violate applicable law or any interpretation of the staff of the

United States Securities and Exchange Commission (the "SEC").


· We can amend or terminate the Exchange Offer.


· We will not receive any proceeds from the Exchange Offer.

· The exchange of Outstanding Notes for the Exchange Notes should not be a taxable exchange for United States federal income tax

purposes. See "Certain Material United States Federal Income Tax Considerations."
Terms of the Exchange Notes:

· The terms of the Exchange Notes are substantially identical to those of the Outstanding Notes, except the transfer restrictions,

registration rights and additional interest provisions relating to the Outstanding Notes do not apply to the Exchange Notes.

· The Exchange Notes and the related guarantees will be our and the guarantors' general unsecured senior obligations and will be
subordinated to all of our and the guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In

addition, the Exchange Notes will be effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the
Exchange Notes, to the extent of the assets of those subsidiaries.

· The Exchange Notes will mature on July 1, 2022. The Exchange Notes will bear interest semi-annually in cash in arrears on July 1 and
January 1 of each year. No interest will be paid on either the Exchange Notes or the Outstanding Notes at the time of the exchange. The

Exchange Notes will accrue interest from and including the last interest payment date on which interest has been paid on the
Outstanding Notes.


· We may redeem the Exchange Notes in whole or in part from time to time. See "Description of the Exchange Notes."
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Form 424(b)(3)
For a discussion of the specific risks that you should consider before tendering your Outstanding Notes in
the Exchange Offer, see "Risk Factors" beginning on page 19 of this prospectus.
There is no established trading market for the Outstanding Notes or the Exchange Notes.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. A broker-dealer who acquired Outstanding Notes as a result of market making
or other trading activities may use this Exchange Offer prospectus, as supplemented or amended from time to time, in connection with any resales
of the Exchange Notes.
Neither the SEC nor any state securities commission has approved or disapproved of the Exchange Notes or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 20, 2014
Table of Contents
TABLE OF CONTENTS

NON-GAAP FINANCIAL MEASURES
iii
MARKET AND INDUSTRY DATA
iii
CAUTIONARY NOTE REGARDING FINANCIAL INFORMATION
iii
CURRENCY EXCHANGE RATE
iv
FORWARD-LOOKING STATEMENTS
iv
PROSPECTUS SUMMARY

1
RISK FACTORS
19
ACQUISITION OF PARTNERSHIPS IN CARE
39
PARTNERSHIPS IN CARE
41
EXCHANGE OFFER
48
USE OF PROCEEDS
58
CAPITALIZATION
59
SELECTED CONSOLIDATED FINANCIAL DATA
60
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
61
DESCRIPTION OF OTHER INDEBTEDNESS
69
DESCRIPTION OF THE EXCHANGE NOTES
74
BOOK-ENTRY, DELIVERY AND FORM
128
CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
130
CERTAIN ERISA CONSIDERATIONS
131
PLAN OF DISTRIBUTION
133
LEGAL MATTERS
135
EXPERTS
135
WHERE YOU CAN FIND MORE INFORMATION
135
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
136

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Each broker-dealer that receives Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a
result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). A broker-dealer who acquired
Outstanding Notes as a result of market making or other trading activities may use this prospectus, as supplemented or amended from
time to time, in connection with any resales of the Exchange Notes. We have agreed that, for a period of up to 180 days after the closing of
the Exchange Offer, we will make this prospectus available for use in connection with any such resale. See "Plan of Distribution."
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Form 424(b)(3)
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any
person to provide you with information different from that contained or incorporated by reference in this prospectus. This prospectus
does not constitute an offer to sell or a solicitation of an offer to buy securities other than those specifically offered hereby or an offer to
sell any securities offered hereby in any jurisdiction where, or to any person whom, it is unlawful to make such an offer or solicitation.
The information in this prospectus is accurate only as of the date on its cover page and any information incorporated by reference herein is
accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or of any sale
of our 5.125% Senior Notes due 2022.
This prospectus incorporates important business and financial information about the company that is not included in or delivered
with this document. For more information regarding the documents incorporated by reference into this prospectus, see "Incorporation of
Certain Documents by Reference" on page 136. We will provide, without charge, to each person, including any beneficial owner, to whom
a copy of this prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the information incorporated
by reference in this prospectus, other than exhibits to such information (unless such exhibits are specifically incorporated by reference
into the information that this prospectus incorporates). Requests for such copies should be directed to:
Acadia Healthcare Company, Inc.
Attention: Chief Financial Officer
830 Crescent Centre Drive, Suite 610
Franklin, Tennessee 37067
Telephone: (615) 861-6000
In order to obtain timely delivery, security holders must request the information no later than five business days before
September 19, 2014, the expiration date of the Exchange Offer.

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NON-GAAP FINANCIAL MEASURES
We have included certain financial measures in this prospectus, including pro forma EBITDA and pro forma adjusted EBITDA, which are
"non-GAAP financial measures" as defined under the rules and regulations promulgated by the SEC. We define pro forma EBITDA as pro forma
net income (loss) adjusted for loss (income) from discontinued operations, net interest expense, income tax provision (benefit) and depreciation
and amortization. We define pro forma adjusted EBITDA as pro forma EBITDA adjusted for equity-based compensation expense, cost savings /
synergies, rate increases, integration and closing costs, rent elimination, other and debt extinguishment costs. For a reconciliation of pro forma net
income (loss) to pro forma adjusted EBITDA, see "Summary--Summary Historical Condensed Consolidated Financial Data and Unaudited Pro
Forma Condensed Combined Financial Data­Summary Unaudited Pro Forma Condensed Combined Financial Data."
Pro forma EBITDA and pro forma adjusted EBITDA, as presented in this prospectus, are supplemental measures of our performance and are
not required by, or presented in accordance with, GAAP. Pro forma EBITDA and pro forma adjusted EBITDA are not measures of our financial
performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance
with GAAP or as an alternative to cash flow from operating activities as measures of our liquidity. Our measurements of pro forma EBITDA and
pro forma adjusted EBITDA may not be calculated similarly to, and therefore may not be comparable to, similarly titled measures of other
companies and are not measures of performance calculated in accordance with GAAP. We have included information concerning pro forma
EBITDA and pro forma adjusted EBITDA in prospectus because we believe that such information is used by certain investors as measures of a
company's historical performance and by securities analysts, investors and other interested parties in the evaluation of issuers of debt securities,
many of which present EBITDA and adjusted EBITDA when reporting their results. Our presentation of pro forma EBITDA and pro forma
adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
MARKET AND INDUSTRY DATA
We obtained the market and competitive position data used throughout this prospectus and in the documents incorporated by reference herein
from our own research, surveys or studies conducted by third parties and industry or general publications. Industry publications and surveys
generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of
such information. While we believe that each of these studies and publications is reliable, we have not independently verified the information, and
we have not ascertained the underlying economic assumptions relied upon therein, and we do not make any representation as to the accuracy of
such information. Similarly, we believe our internal research is reliable but it has not been verified by any independent sources. Our estimates
involve risks and uncertainties, and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in
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Form 424(b)(3)
this prospectus.
CAUTIONARY NOTE REGARDING FINANCIAL INFORMATION
The audited consolidated financial statements as of and for the financial years ended December 31, 2013, 2012 and 2011 relating to
Partnerships in Care that are included in, or incorporated by reference into, this prospectus have been prepared in accordance with United Kingdom
Accounting Standards, or U.K. GAAP. U.K. GAAP differs in certain respects from generally accepted accounting principles in the United States,
or U.S. GAAP. Partnerships in Care has not prepared and does not currently intend to prepare its financial statements in U.S. GAAP. A
reconciliation to U.S. GAAP is included in the Partnerships in Care financial statements.
This prospectus contains and incorporates by reference certain unaudited information, including revenue and operating statistics based on
revenue, that is presented on a pro forma basis assuming that the Partnerships in Care acquisition, and acquisitions occurred as of January 1, 2013.
The unaudited pro forma financial information has been prepared using the acquisition method of accounting for business combinations under
GAAP. The unaudited pro forma financial information is for illustrative purposes only and does not purport to represent what our financial
condition or results of operations actually would have been had the events in fact occurred on the assumed date or to project our financial condition
or results of operations for any future date or future period. The unaudited pro forma financial information should be read in conjunction with the
consolidated financial statements and notes thereto elsewhere in this prospectus and the financial statements of Acadia in other reports that we have
filed with the SEC.

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CURRENCY EXCHANGE RATE
This prospectus contains translations of amounts denominated in British Pounds Sterling into U.S. dollars at specific rates solely for the
convenience of the prospectus recipients. Unless otherwise noted, all translations from British pounds to U.S. dollars and from U.S. dollars to
British pounds in this prospectus were made at a rate of (£0.5972) British Pound Sterling for one ($1.00) U.S. Dollar or U.S. $1.6753 for one
(£1) British Pound Sterling, the exchange rate set forth in the Federal Reserve Statistical Release, Foreign Exchange Rates on June 3, 2014. Certain
financial information for Partnerships in Care presented herein are translated to U.S. dollars based on the historical exchange rates set forth in the
financial statements of Partnerships in Care appearing in this prospectus or incorporated by reference herein. We make no representation that any
amounts denominated in either British Pounds Sterling or U.S. dollars could have been, or could be, converted into either British Pounds Sterling
or U.S. dollars, as applicable, at any particular rate, at the rates stated above, or at all.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements." Forward-looking statements include any statements that address future results or
occurrences. In some cases you can identify forward-looking statements by terminology such as "may," "might," "will," "would," "should,"
"could" or the negative thereof. Generally, the words "anticipate," "believe," "continue," "expect," "intend," "estimate," "project," "plan" and
similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or
future events or performance contain forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and
unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or
achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These
risks, uncertainties and other factors include, but are not limited to:


· our significant indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt;

· difficulties in successfully integrating the operations of acquired facilities, including those acquired in the Partnerships in Care

acquisition, or realizing the potential benefits and synergies of these acquisitions;

· our ability to implement our business strategies in the United Kingdom and adapt to the regulatory and business environment in the

United Kingdom;

· the impact of payments received from the government and third-party payors on our revenues and results of operations including the

significant dependence of the Partnerships in Care facilities on payments received from the National Health Service in the United
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Form 424(b)(3)
Kingdom, or NHS;

· the occurrence of patient incidents, which could result in incremental regulatory burdens, governmental investigations, negative

publicity and adversely affect the trading price of our securities;


· our future cash flow and earnings;


· our restrictive covenants, which may restrict our business and financing activities;


· our ability to make payments on our financing arrangements;

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· the impact of the economic and employment conditions in the United States and the United Kingdom on our business and future results

of operations;


· compliance with laws and government regulations;


· the impact of claims brought against our facilities;


· the impact of governmental investigations, regulatory actions and whistleblower lawsuits;


· the impact of healthcare reform in the United States and abroad;


· the impact of our highly competitive industry on patient volumes;


· our ability to recruit and retain quality psychiatrists and other physicians;


· the impact of competition for staffing on our labor costs and profitability;


· our dependence on key management personnel, key executives and local facility management personnel;

· our acquisition strategy, which exposes us to a variety of operational and financial risks, as well as legal and regulatory risks (e.g.,

exposure to the new regulatory regimes such as the United Kingdom for Partnerships in Care);

· the impact of state efforts to regulate the construction or expansion of healthcare facilities (including those from Partnerships in Care)

on our ability to operate and expand our operations;


· our potential inability to extend leases at expiration;


· the impact of controls designed to reduce inpatient services on our revenues;


· the impact of different interpretations of accounting principles on our results of operations or financial condition;


· the impact of environmental, health and safety laws and regulations, especially in states where we have concentrated operations;

· the impact of an increase in uninsured and underinsured patients or the deterioration in the collectability of the accounts of such patients

on our results of operations;

· the risk of a cyber-security incident and any resulting violation of laws and regulations regarding information privacy or other negative

impact;

· the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic

transactions;


· the impact of a change in the mix of our earnings, and changes in tax rates and laws generally;


· failure to maintain effective internal control over financial reporting;


· the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities;


· the impact of our equity sponsor's rights over certain company matters;

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· the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our ability to

obtain patients; and


· those risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission.
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and
uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-
looking statements are made only as of the date of this prospectus. We do not undertake and specifically decline any obligation to update any such
statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments. All subsequent
written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by these
cautionary statements.

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PROSPECTUS SUMMARY
This summary highlights selected information appearing elsewhere in or incorporated by reference in this prospectus. This summary is
not complete and does not contain all of the information that you should consider before deciding whether to participate in the Exchange
Offer. You should carefully read the entire prospectus and the information incorporated herein by reference, including the section entitled
"Risk Factors" beginning on page 19 and the financial statements and notes thereto included elsewhere in or incorporated by reference in this
prospectus.
In this prospectus, unless the context requires otherwise, references to "Acadia," "the Company," "we," "us" or "our" refer to Acadia
Healthcare Company, Inc. together with its consolidated subsidiaries. When we refer to our operations or results "on a pro forma basis," we
mean the statement is made as if the Partnerships in Care acquisition had been completed as of the date stated or as of the beginning of the
period referenced.
Our Company
We are the leading publicly traded pure-play provider of inpatient behavioral healthcare services based upon number of licensed beds in
the United States. As of July 1, 2014, we operated 75 behavioral healthcare facilities with over 5,600 licensed beds in 24 states, Puerto Rico
and the United Kingdom. We believe that our primary focus on the provision of behavioral healthcare services allows us to operate more
efficiently and provide higher quality care than our competitors. On a pro forma basis for the six months ended June 30, 2014 and the year
ended December 31, 2013, giving effect to the acquisition of Partnerships in Care, we would have generated pro forma revenue of
approximately $557.5 million and approximately $1.0 billion, respectively, pro forma net income of approximately $43.3 million and $71.5
million, respectively, and pro forma adjusted EBITDA of $118.6 million and $219.1 million, respectively. A reconciliation of pro forma
adjusted EBITDA to pro forma net income appears on page 17 of this prospectus.
Our inpatient facilities offer a wide range of inpatient behavioral healthcare services for children, adolescents and adults. We offer these
services through a combination of acute inpatient psychiatric and specialty facilities and residential treatment centers ("RTCs"). Our acute
inpatient psychiatric and specialty facilities provide the most intensive level of care, including 24-hour skilled nursing observation and care,
daily interventions and oversight by a psychiatrist and intensive, highly coordinated treatment by a physician-led team of mental health
professionals. Our RTCs offer longer-term treatment programs primarily for children and adolescents with long-standing chronic behavioral
health problems. Our RTCs provide physician-led, multi-disciplinary treatments that address the overall medical, psychiatric, social and
academic needs of the patient. During the year ended December 31, 2013, we acquired seven facilities with an aggregate of 694 licensed beds
including a 75-bed facility under construction, which opened on October 1, 2013. In addition, we added 325 new beds during the year ended
December 31, 2013, including opening two newly-developed facilities with a combined 102 licensed beds. We expect to add over 300 total
beds during 2014 (exclusive of acquisitions).
Our outpatient community-based services provide therapeutic treatment to children and adolescents who have a clinically defined
emotional, psychiatric or chemical dependency disorder while enabling patients to remain at home and within their community. Many patients
who participate in community-based programs have transitioned out of a residential facility or have a disorder that does not require placement
in a facility that provides 24-hour care.
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Form 424(b)(3)
Acquisition of Partnerships in Care
In this prospectus, we refer to our recently completed acquisition of Partnerships in Care as the "Acquisition."
Overview. On July 1, 2014, we completed the Acquisition, for total consideration, net of cash acquired, of £395 million (approximately
$662 million) in cash. We consummated the Acquisition pursuant to a share purchase agreement, dated as of June 3, 2014 (the "Agreement"),
by and among the Company, Piper Holdco 2, Ltd., a company incorporated in England and Wales (the "Purchaser"), and a wholly-owned,
indirect subsidiary of the Company, Partnerships in Care Holdings Limited, a company incorporated in England and Wales (the "Seller"), and
The Royal Bank of Scotland plc, a company incorporated in England and Wales ("RBS"). We joined the Agreement for the purpose of
guarantying the Purchaser's obligations arising under the Agreement.


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Pursuant to the terms of the Agreement, (i) the Seller sold, and the Purchaser purchased, all of the issued and outstanding ordinary shares
of Partnerships in Care Investments 1 Limited, a company incorporated in England and Wales (the "Target"), and a wholly-owned, direct
subsidiary of the Seller, and (ii) RBS sold, and the Purchaser purchased, the issued and outstanding A ordinary shares owned by the RBS of
Partnerships in Care Property 1 Limited, a company incorporated in England and Wales and a wholly-owned, indirect subsidiary of the Target.
We acquired all of the Seller's mental health facilities and business as a result of the transaction, which included 23 inpatient behavioral health
facilities located in England, Wales and Scotland with over 1,200 beds. For the year ended December 31, 2013 and the six months ended
June 30, 2014, Partnerships in Care generated revenue of $267.0 million and $142.3 million, respectively, primarily through the operation and
management of inpatient behavioral health facilities. See "Acquisition of Partnerships in Care."
Strategic Rationale. We expect to realize significant benefits from the Acquisition. Our rationale for the Acquisition includes the
following:
Expand our geographic presence into a new, attractive market. The mental health market in the United Kingdom was roughly
£14.4 billion in 2013. The independent mental health market accounted for roughly £1.1 billion of that amount, or approximately 8%
market share. As a result of government budget constraints and an increased focus on quality, the independent mental health market has
witnessed significant expansion in the last decade, making it one of the fastest growing sectors in United Kingdom healthcare industry.
Acquire a leading platform in the market. Partnerships in Care is the second largest independent provider of inpatient behavioral
healthcare services in the United Kingdom, operating 23 inpatient behavioral health facilities with over 1,200 beds. The company holds
an approximately 16% market share of the independent behavioral health market. In addition, Partnerships in Care is one of only two
independent providers in the United Kingdom offering the full spectrum of mental health services. Partnerships in Care also has an
experienced management team with market knowledge and relationships within the industry and governmental bodies.
Financially attractive and accretive acquisition. We expect the combined benefits of increased adjusted EBITDA and a reduced
income tax rate will produce earnings accretion (not including the impact of any future acquisitions beyond the purchase of Partnerships
in Care or any transaction-related expenses).
Opportunities for future growth. Demand for independent behavioral health services has grown significantly in the United
Kingdom as a result of the National Health Service, or NHS, reducing bed capacity and increased hospitalization rates. Outsourcing
demand is expected to increase in light of additional bed closures and reduction in community capacity by NHS. The independent
market in the United Kingdom is highly fragmented with the largest four players accounting for 58% market share. These factors present
opportunities for growth by well capitalized, experienced operators. In addition, our management sees meaningful opportunities to
produce organic growth in Partnerships in Care's existing facilities through the addition of new beds and service line expansions to meet
areas of unmet need. Management also expects to pursue additional select acquisitions in the United Kingdom.
Financing of the Acquisition. We funded the Acquisition using the proceeds of the sale of $300 million of the Outstanding Notes
completed on July 1, 2014, using proceeds of an approximately $374 million registered offering of common stock completed on June 17, 2014
and using borrowings under the revolving line of credit available under our amended and restated senior credit facility (the "Amended and
Restated Senior Credit Facility"). See "--Recent Developments."


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Our Competitive Strengths
We believe the following strengths differentiate us from our competitors:
Premier operational management team with track record of success. Our management team has approximately 170 combined years of
experience in acquiring, integrating and operating a variety of behavioral health facilities. Following the sale of Psychiatric Solutions, Inc.
("PSI") to Universal Health Services, Inc. in November 2010, certain of PSI's key former executive officers joined Acadia in February 2011.
The extensive national experience and operational expertise of our management team gives us what management believes to be the premier
leadership team in the behavioral healthcare industry. Our management team strives to use its years of experience operating behavioral health
facilities to generate strong cash flow and grow a profitable business.
Favorable industry and legislative trends. According to the National Institute of Mental Health, approximately 6% of people in the
United States suffer from a seriously debilitating mental illness and over 20% of children, either currently or at some point during their life,
have had a seriously debilitating mental disorder. We believe the market for behavioral services will continue to grow due to increased
awareness of mental health and substance abuse conditions and treatment options. According to a 2008 report by the Substance Abuse and
Mental Health Services Administration of the U.S. Department of Health and Human Services, national expenditures on mental health and
substance abuse treatment are expected to reach $239 billion in 2014, up from $121 billion in 2003, representing a compound annual growth
rate of approximately 6.4%.
While the growing awareness of mental health and substance abuse conditions is expected to accelerate demand for services, recent
healthcare reform is expected to increase access to industry services as more people obtain insurance coverage. A key aspect of reform
legislation is the extension of mental health parity protections established into law by the Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008 (the "MHPAEA"). The MHPAEA provides for equal coverage between psychiatric or mental health
services and conventional medical health services and forbids employers and insurers from placing stricter limits on mental healthcare
compared to other health conditions.
As described above, the mental health market in the United Kingdom was roughly £14.4 billion in 2013. As a result of government
budget constraints and an increased focus on quality, the independent mental health market has witnessed significant expansion in the last
decade, making it one of the fastest growing sectors in United Kingdom healthcare industry. Demand for independent acute care services has
grown significantly as a result of NHS reducing bed capacity and increased hospitalization rates. Outsourcing demand is expected to increase
in light of additional bed closures and reduction in community capacity by NHS.
Leading platform in attractive healthcare niche. We are a leading behavioral healthcare platform in an industry that is undergoing
consolidation in an effort to reduce costs and expand programs to better serve the growing need for inpatient behavioral healthcare services. In
addition, the behavioral healthcare industry has significant barriers to entry, including (i) significant initial capital outlays required to open
new facilities, (ii) expertise required to deliver highly specialized services safely and effectively and (iii) high regulatory hurdles that require
market entrants to be knowledgeable of state and federal laws and facilities to be licensed with local agencies.
Diversified revenue and payor bases. As of December 31, 2013, we operated 51 facilities in 23 states and Puerto Rico. Our payor,
patient/client and geographic diversity mitigates the potential risk associated with any single facility. For the year ended December 31, 2013,
we received 48% of our revenue from Medicaid, 25% from commercial payors, 22% from Medicare, and 5% from self-pay and other payors.
On a pro forma basis for the 12 months ended June 30, 2014, giving effect to the Partnerships in Care acquisition, we would have received
35% of our revenue from Medicaid, 24% from NHS, 19% from commercial payors, 17% from Medicare and 5% from other payors. As we
receive Medicaid payments from 30 states, the District of Columbia and Puerto Rico, management does not believe that we are significantly
affected by changes in reimbursement policies in any one state. Substantially all of our Medicaid payments relate to the care of children and
adolescents. Management believes that children and adolescents are a patient class that is less susceptible to reductions in reimbursement rates.
No facility accounted for more than 6% of revenue for the year ended December 31, 2013. On a pro forma basis, giving effect to the
Partnerships in Care acquisition, no facility accounts for more than 5% of total revenue for the 12 months


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ended June 30, 2014. No state or territory accounted for more than 17% of revenue for the year ended December 31, 2013. Additionally, on a
pro forma basis, no U.S. state or territory would have accounted for more than 26% of total revenue for the 12 months ended June 30, 2014.
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We believe that our increased geographic diversity will mitigate the impact of any financial or budgetary pressure that may arise in a particular
state or market where we operate.
Strong cash flow generation and low capital requirements. We generate strong free cash flow by profitably operating our business and
by actively managing our working capital. Moreover, as the behavioral healthcare business does not typically require the procurement and
replacement of expensive medical equipment, our maintenance capital expenditure requirements are generally less than that of other facility-
based healthcare providers. For the year ended December 31, 2013, our maintenance capital expenditures amounted to approximately 2.3% of
our revenue. In addition, our accounts receivable management is less complex than medical/surgical hospital providers because behavioral
healthcare facilities have fewer billing codes and generally are paid on a per diem basis.
Business Strategy
We are committed to providing the communities we serve with high quality, cost-effective behavioral health services, while growing our
business, increasing profitability and creating long-term value for our stockholders. To achieve these objectives, we have aligned our activities
around the following growth strategies:
Increase margins by enhancing programs and improving performance at existing facilities. Management believes we can improve
efficiencies and increase operating margins by utilizing our management's expertise and experience within existing programs and their
expertise in improving performance at underperforming facilities. Management believes the efficiencies can be realized by investing in growth
in strong markets, addressing capital-constrained facilities that have underperformed and improving management systems. Furthermore, our
recent acquisitions of additional facilities give us an opportunity to develop a marketing strategy in many markets which should help us
increase the geographic footprint from which our existing facilities attract patients and referrals.
Opportunistically pursue acquisitions. We have established a national platform for becoming the leading dedicated provider of high
quality behavioral healthcare services in the U.S. With the Partnerships in Care acquisition, we intend to establish our company as a leading
independent provider of mental health services in the United Kingdom. The behavioral healthcare industry in the United States and the
independent behavioral healthcare industry in the United Kingdom are highly fragmented, and we selectively seek opportunities to expand and
diversify our base of operations by acquiring additional facilities.
Management believes there are a number of acquisition candidates available at attractive valuations, and we have a number of potential
acquisitions in various stages of development and consideration in the United States. In addition, management sees meaningful opportunities
to pursue additional select acquisitions in the United Kingdom.
Management believes our focus on inpatient behavioral healthcare and history of completing acquisitions provides us with a strategic
advantage in sourcing, evaluating and closing acquisitions. We leverage our management team's expertise to identify and integrate
acquisitions based on a disciplined acquisition strategy that focuses on quality of service, return on investment and strategic benefits. We also
have a comprehensive post-acquisition strategic plan to facilitate the integration of acquired facilities that includes improving facility
operations, retaining and recruiting psychiatrists and other healthcare professionals and expanding the breadth of services offered by the
facilities.
Drive organic growth of existing facilities. We seek to increase revenue at our facilities by providing a broader range of services to new
and existing patients and clients. In addition, management intends to increase licensed bed counts in our existing facilities, with a focus on
increasing the number of acute psychiatric beds. During the year ended December 31, 2013, we acquired seven facilities with an aggregate of
694 licensed beds including a 75-bed facility under construction, which opened on October 1, 2013. In addition, we added 325 new beds
during the year ended December 31, 2013, including opening two newly-developed facilities with a combined 102 licensed beds. We expect
to add over 300 total beds during 2014 (exclusive of acquisitions). Furthermore, management believes that opportunities exist to leverage out-
of-state referrals to increase volume and minimize payor concentration in the United States, especially with respect to our youth and
adolescent focused services and our substance abuse services.


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Recent Developments
In addition to the completion of the Acquisition and the issuance of the Outstanding Notes described elsewhere in this prospectus, we had
the following recent developments:
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Form 424(b)(3)
On June 17, 2014, we completed a registered offering of 8,881,794 shares of our common stock at a public offering price of $44.00 per
share, for total proceeds to the Company of approximately $374.0 million, after underwriting discounts and estimated offering expenses. The
shares sold by Acadia include shares issued as a result of the underwriters' exercise of the option to purchase additional shares of common
stock, all at the public offering price less the underwriting discount. We used the proceeds from the equity offering to fund the Acquisition of
Partnerships in Care and the fees and expenses related to the Acquisition.
On June 16, 2014, we entered into the Fifth Amendment to the Amended and Restated Senior Credit Facility. The Fifth Amendment
specifically permits our acquisition of Partnerships in Care, gives us the ability to incur a tranche of term loan B debt in the future through our
incremental credit facility, and modifies certain of the restrictive covenants on miscellaneous investments and incurrence of miscellaneous
liens. The restrictive covenants on investments in joint ventures and foreign subsidiaries were also amended such that we may now invest, in
any given fiscal year, up to five percent (5%) of our total assets in both joint ventures and foreign subsidiaries, respectively; provided that the
aggregate amount of investments in both joint ventures and foreign subsidiaries, respectively, may not exceed ten percent (10%) of our total
assets over the life of the Amended and Restated Senior Credit Facility; provided further that the aggregate amount of investments made in
both joint ventures and foreign subsidiaries collectively pursuant to the foregoing may not exceed fifteen percent (15%) of our total assets.
Finally, the Fifth Amendment provided increased flexibility to us in terms of our financial covenants. See "Description of Other Indebtedness
--Amended and Restated Credit Facility" for a more detailed description of the Fifth Amendment. We utilized the proceeds of the offering of
the Outstanding Notes to finance the Acquisition and did not finance the Acquisition with any term loans.
On June 9, 2014, we launched a consent solicitation under our indenture for the 12.875% Senior Notes due 2018 (the "12.875% Senior
Notes") in order to facilitate our incurring additional permitted liens securing indebtedness so long as our secured leverage ratio is under 3.5x.
The consent solicitation expired on June 17, 2014 and we received valid consents approving an amendment to the indenture from the holders
of $96,885,000 in aggregate principal amount of the 12.875% Senior Notes, representing 99.37% of the total aggregate principal amount of the
12.875% Senior Notes. The amendment, evidenced by a supplemental indenture dated June 17, 2014, increased the prior secured leverage
ratio of 3.0x to a senior leverage ratio of 3.5x.
Equity Sponsor
As of August 1, 2014, Waud Capital Partners, L.L.C. and its affiliates ("Waud Capital Partners") owned approximately 19.7% of our
common stock. Founded in 1993, Waud Capital Partners is a leading middle-market private equity firm that partners with management teams
to create, acquire and grow companies that address significant, inefficient, highly fragmented and underserved industry segments. Waud
Capital Partners invests primarily through control-oriented growth equity investments, industry consolidations, buyouts or recapitalizations
and seeks companies that generate strong cash flow and can be grown both organically and through add-on acquisitions. Waud Capital
Partners' current and exited portfolio is composed of companies in the healthcare, business/consumer, logistics/specialty distribution and
value-added industrial business segments.
So long as Waud Capital Partners owns at least 17.5% of our outstanding common stock, it is entitled to designate the pro rata number of
our directors that is proportional (but rounded up to the nearest whole number) to its percentage ownership of our outstanding common stock,
subject to the NASDAQ rules regarding director independence, and has consent rights to many corporate actions, such as issuing equity or
debt securities, paying dividends, acquiring any interest in another company and materially changing our business activities. This means that
we cannot engage in any of those activities without the consent of Waud Capital Partners.


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Company Information
Acadia Healthcare Company, Inc. is a Delaware corporation. On May 13, 2011, we converted from a Delaware limited liability company
(Acadia Healthcare Company, LLC) to a Delaware corporation (Acadia Healthcare Company, Inc.) in accordance with Delaware law. Our
principal executive offices are located at 830 Crescent Centre Drive, Suite 610, Franklin, Tennessee 37067. Our telephone number is
(615) 861-6000. Our website is http://www.acadiahealthcare.com. The information contained on our website is not part of this prospectus and
is not incorporated in this prospectus by reference.


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