Acadia Healthcare (ACHC – Snapshot Report) is back to a Zacks #1 Rank as the company’s latest and greatest acquisition will be immediately accretive to annual earnings by 15%. And some analysts are pretty sure that this company guidance is conservative.

Nashville-based Acadia is the leading specialty provider of behavioral health services in the US, and soon in the UK. They provide psychiatric and chemical dependency services, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

On January 4, Acadia announced a $2.2 billion deal to buy the Priory Group, the UK’s largest behavioral care provider managing over 300 facilities with 7,200 beds. Priory is known for being the addiction treatment and rehab locale for Britain’s famous and wealthy.

A Reverse British Invasion

Acadia already owned the second-largest behavioral health group in the UK when they purchased Partners in Care (PiC) in 2014. Priory’s 7,200 beds and PiC’s 2,000 beds will have a combined market share of 30% in the UK mental health provider market.

To help finance the purchase of Priory, Acadia issued 10 million new shares of stock in a public offering at the price of $61. The Priory purchase price will consist of $1.9 billion in cash and $335 million of the newly issued equity, or 5.4 million shares. The companies expect to close this transaction by February 16, 2016.

So far, the share offering, which was priced on January 6, appears to be well-accepted by large investors as the stock has traded between $61 and $65 on strong volume since the pricing. This indicates willing demand by existing large shareholders and new investors.

It’s also worth noting that the UK has much lower corporate tax rates: 20% in 2016, 19% in 2017 and there is a proposal to reduce that further to 18% by 2020.

Earnings Growth Trend

Acadia is on a stated mission to double their 2015 revenues of nearly $2 billion by 2018. Obviously, M&A is a key part of that strategy. But the company is also focused on organic growth and making their facilities a unique part of each community where families and individuals can seek healing from mental health or substance abuse issues.