Activist Investor Builds 3% Stake In Acadia, Urges Board Refresh

Core Viewpoint - Activist investor Engine Capital is urging Acadia Healthcare to restructure its board and reassess its growth strategy due to ongoing federal investigations and significant share price declines [1][2]. Group 1: Investor Pressure - Engine Capital holds approximately a 3% stake in Acadia, making it one of the company's ten largest shareholders [1]. - The hedge fund has called for a halt to costly new projects and a review of the asset portfolio [2][3]. - The letter highlights Acadia's consistent negative returns and underperformance compared to healthcare peers, resulting in shares being undervalued [2][5]. Group 2: Operational Concerns - Underperformance is attributed to poor execution, missteps in reorganization under CEO Christopher Hunter, rising costs, and inadequate board oversight [3][4]. - Engine Capital criticizes Acadia's "growth at any cost" strategy, which has led to an oversized corporate structure and limited operational improvements [4]. - The hedge fund emphasizes the need for a board refresh with directors who have experience in behavioral health and capital allocation [4][5]. Group 3: Financial Performance - Acadia's market value has significantly decreased, with shares down 71% over the past year, placing its equity valuation just above $2 billion [5]. - The stock price has recently seen a slight increase of 9.87%, reaching $24.19 [5].