After a brief suspension in the sale process, Acadia Healthcare Company, Inc. (NASDAQ: ACHC) has finally found a buyer for its U.K. behavioral health care operations, known as Priory Group. Acadia first began exploring a divestment of Priory Group in early 2020, but talks were suspended when the Covid-19 pandemic hit. In September, Acadia released a statement that said it was resuming the sale process, and the company finally managed to close the deal on December 30.

The buyer is Waterland Private Equity, an independent private equity investment group based in The Netherlands. The firm is paying approximately GBP 1.78 billion, or US $1.47 billion, based on the current exchange rate, for Priory Group. The business has 361 behavioral health facilities with 8,700 beds across the U.K. In 2019, the Priory Group generated $1.1 billion in revenue, and is expected to have annualized 2020 EBITDA of $160 million.

Acadia intends to use the proceeds to pay down debt and for other corporate purposes. The sale includes the entirety of Acadia’s U.K. operations. The transaction is expected to close in January 2021.

According to search results in our Healthcare Deal Database, Acadia Healthcare purchased Priory Group back in January 2016 for $2.25 billion, or $1.8 billion in cash and the rest in Acadia shares. At the time, Priory had more than 300 facilities with approximately 7,200 beds. In order to address anti-competition concerns raised by the Competition and Markets Authority in the U.K., Acadia Healthcare had to sell 21 Priory Group facilities (approximately 1,000 beds) for $395 million to BC Partners in October 2016.

You might have noticed Acadia sold Priory Group for a good amount less than what it paid for in 2016. Based on our math, it seems like Acadia is $385 million in the red for this investment. Could the difference have been made up in the cash flow brought in over the years? Perhaps, but based on the sale price, we’re skeptical. Despite the surge in demand for mental health services, it seems like Acadia was eager to exit the U.K. market.