Revenue Growth Strategy and Market Expansion
Christopher Hunter set an ambitious target when he became CEO of Acadia Healthcare in 2022: double the company’s revenue by 2028. This growth mandate shapes multiple strategic initiatives across the behavioral health provider’s operations.
Mergers and acquisitions represent a critical component. Hunter described M&A as a strategic priority during an appearance at the Barclays 26th Annual Global Healthcare Conference. “It’s such a fragmented industry across service lines,” Hunter said. “I think we’re increasingly seen as an acquirer of choice, and we have a very robust pipeline across all of our lines of business.”
The company uses M&A to enter desirable markets more efficiently than other growth tactics, which require substantial time to implement. During the Barclays conference, Hunter disclosed that Acadia Healthcare had acquired two comprehensive treatment centers in North Carolina. These facilities offer outpatient medication-assisted treatment and related health services for individuals with opioid use disorder.
Joint ventures with health systems form another growth avenue. Acadia has established 21 joint venture partnerships for 22 hospitals, with 13 facilities currently operational and nine additional hospitals expected to open in coming years. These partnerships allow Acadia to combine its behavioral health expertise with established health systems’ community presence and infrastructure.
Facility expansion and bed additions constitute the third major growth strategy. Acadia added 776 beds to its footprint during 2024: 312 beds at existing facilities and 464 beds through four wholly-owned facilities plus one joint venture facility opened during the year. The first quarter of 2025 saw the addition of 378 newly licensed beds, including 90 beds at existing facilities and 288 beds at newly constructed facilities.
CFO Heather Dixon, who also spoke at the Barclays conference, indicated the company’s balance sheet has capital available to spend or leverage into debt for M&A and other growth activities. Acadia generated $3.1 billion in revenue during the first nine months of 2024, with 57% from Medicaid, 26% through commercial insurance, 14% through Medicare, and 3% through self-pay and other sources.
Comprehensive treatment centers generated 17% of Acadia’s $2.9 billion in 2023 revenue. Revenue from comprehensive treatment centers grew 19% year-over-year in 2023. The company opened six new facilities in this service line during 2023 and planned to add 14 more by the end of 2024, excluding acquisitions. Each comprehensive treatment center produces approximately $3.3 million annually on average, takes 12 to 18 months to reach break-even, and requires two to three years to achieve targeted profit margins, according to Dixon.