American Addiction Centers (AAC Holdings, Inc.) has acquired a 100-room hotel in Arlington, Texas, for $5.35 million in cash. The property will be converted into a sober living facility.
Located less than three miles from AAC’s 130-bed Greenhouse residential facility and outpatient center, the hotel currently operates as the Econo Lodge Inn and Suites Six Flags. The three-story hotel currently has a courtyard and swimming pool area as well as meeting and dining space.
AAC expects the property to generate approximately $5 million in incremental revenue and approximately $2 million in incremental adjusted EBITDA for the Greenhouse outpatient center in 2017.
“With the visits generated by our new Greenhouse outpatient facility in Arlington, we are running at maximum capacity with our current sober living arrangements,” said Michael Cartwright, chairman and CEO of AAC Holdings, in a statement. “The additional 100-room sober living capacity will enable us to continue serving clients from both Greenhouse facilities as well as meet the growing demands for intensive outpatient treatment from the Dallas-Fort Worth community.”
The acquisition was funded with proceeds provided by the Deerfield subordinated credit facility. AAC currently operates 26 substance abuse treatment facilities.