Engine Capital builds 3% stake in Acadia, urges board refresh, FT reports

Engine Capital, and activist hedge fund, has built a roughly 3% stake in Acadia Healthcare (ACHC) and is arguing that the company needs a board refresh, The Financial Times’ Oliver Barnes reports. The stake puts Engine among Acadia’s 10 biggest investors and comes as the company faces DOJ and SEC probes into allegations of holding patients against their will and falsifying insurance claims. In a letter seen by the FT, Engine accused Acadia of maintaining a “growth at any cost” approach that has given rise to a bloated corporate structure. It also wrote that a 2022 reorganization left it with an unwieldy management structure that has stifled the company’s turnaround. “It is stunning that Acadia’s board does not have a single director with relevant operating experience,” Engine wrote in its letter to the board. It also encouraged the company to consider asset sales to free up cash to buy its “deeply undervalued” shares.