Private Equity News & Analysis

Waud launches new healthcare platform

Waud Capital Partners has launched its latest healthcare roll-up, Acadia Healthcare. The firm is partnering with the same executive that spearheaded its Regency Hospital roll-up.

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Illinois-based Waud Capital Partners has again partnered up with Rod Laughlin to launch Acadia Healthcare, a platform that will acquire and manage psychiatric and substance abuse hospitals, residential programs and schools.

Reeve Waud, managing partner, Waud Capital Partners

The new initiative represents the second time Waud has teamed up with Laughlin for a healthcare roll-up. The firm and Laughlin previously combined forces to pursue a consolidation of long term acute care hospitals through an Atlanta-based platform, Regency Hospital Co. The business, which is still in Waud’s portfolio, has accumulated sixteen hospitals to date.

Regarding the new platform, Laughlin will serve as chairman and chief executive, and Waud expects to begin acquiring properties within the next two months, according to a statement.

Waud’s push into the substance-abuse segment follows public statements last summer from Reeve Waud, who heads the firm, that the long term acute care space has started to get expensive. Corporate Financing Week quoted him as saying that Regency wasn’t for sale, but it would focus on organic growth as opposed to continued acquisitions.

Last summer, Regency was among the losing bidders for Cornerstone Healthcare Group, an acute-care hospital operator that went to JW Childs Associates.

The substance-abuse space, meanwhile, has also seen some consolidation activity, although it hasn’t been as popular a target among buyout groups as acute care. North Castle Partners, based out of Greenwich, was among the first to invest in the sector, and last October realised a more than 3x return on its investment in CRC Health Group. Bain Capital bought the business for $720 million.

Waud is currently investing out of its second fund. Las spring, the firm filed documents with the SEC indicating it had amassed $244 million in commitments for the new vehicle, Waud Capital Partners II. The firm is backed by the likes of Citigroup, Middlebury College, SunAmerica and The University of Chicago Hospitals, among others.