US-owned Acadia Healthcare buys the Priory for £1.28bn

The Priory, famed for treating celebrities with drink and drug problems, has been sold to a US chain of clinics.

Priory Group, which consists of the original south-west London clinic and more than 300 other sites in the UK, has been bought by Acadia Healthcare for £1.28bn from private equity group Advent.

Social care providers in the UK are under pressure as the fees that local authorities pay towards patients falls and costs rise, a problem which will be exacerbated when the national living wage comes into force in April.

Acadia said there were opportunities for private sector care providers to expand as publicly-funded care is squeezed. The US company already has 54 facilities in the UK.

Joey Jacobs, the chairman and chief executive of Acadia, said: “We believe the favourable industry dynamics that support this strategy – in particular, a long-term increase in the need for independent sector support for inpatient behavioural health – will provide Acadia with continuing long-term accretive organic growth and acquisition opportunities.

Related: Priory hospital owners, Advent International, looking to 'consolidate'

“We look forward to welcoming Priory’s outstanding team to Acadia and to building on a sector leadership position that reflects Priory’s clinical expertise, strong operations and high-quality facilities.”

Acadia provides similar “behavioural health services”, or treatment for addiction, depression and psychiatric complaints, across the US. It entered the UK market 18 months ago by buying Priory’s rival Partnerships in Care, but will expand significantly after the latest deal.

The Priory is the oldest and most famous private psychiatric hospital in London, notable for the number of entertainers and pop stars checking in for treatment or rehab over the decades, from Paul Robeson to Amy Winehouse.

It was acquired by private equity firm Advent in 2011 from a consortium of investors including the Royal Bank of Scotland for £925m. Lord Ashcroft, the former Conservative party deputy chairman and co-author of a biography about David Cameron, previously held a 32.5% stake in the group.

Tom Riall, chief executive of Priory, said: “We are creating a genuine world leader in the provision of behavioural healthcare services, and we are excited about the opportunities for the future.”

Rumours that Advent was looking to offload Priory surfaced last summer, with suggestions that the private equity group was pushing for a public flotation of the company.

Priory cares for more than 30,000 people. It is split into four divisions: healthcare; education and children’s services; adult care; and older people’s care.

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