Engine Capital urges Acadia Healthcare board changes

Engine Capital LP sent a letter to Acadia Healthcare Company Inc.'s (NASDAQ: ACHC) board of directors calling for strategy and governance changes at the behavioral healthcare provider.

Engine Capital, which owns approximately 3% of Acadia's outstanding shares, stated in the letter that the company has delivered negative returns and underperformed other healthcare facility operators across all relevant periods, causing it to trade at what the firm characterizes as a deep discount to intrinsic value.

The investment firm attributes Acadia's underperformance to what it describes as poor execution, a flawed reorganization under CEO Christopher Hunter, rising costs, poor capital allocation decisions, and insufficient board oversight.

Engine Capital recommended that Acadia immediately halt growth capital projects, prioritize operational and cost structure improvements, explore potential asset sales, and repurchase shares. The firm also called for board refreshment with new directors who have behavioral health operating experience and capital allocation expertise.

Engine Capital LP describes itself as a value-oriented special situations fund that invests in companies undergoing change. The recommendations were outlined in a letter made available through the firm's website, according to the press release statement.

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