By Dania Nadeem
(Reuters) -Acadia Healthcare Co Inc said on Wednesday it would sell its UK unit the Priory Group, a care homes operator known for its celebrity clientele, to private equity firm Waterland for about 1.08 billion pounds ($1.47 billion).
The deal comes more than a year after the behavioral healthcare services provider said it was looking to sell the business, which it had acquired in January 2016 for nearly $850 million.
Priory has more than 450 facilities throughout Britain and specializes in the treatment of mental health problems, including eating disorders, as well as alcohol and drug addictions.
Celebrities such as model Katie Price and singer Eric Clapton have sought treatment for addiction at Priory's flagship hospital in southwest London.
Shares of Acadia rose about 2% to $49.5 as the Franklin, Tennessee-based company said it expects proceeds of about $1.35 billion from the sale, with the amount set to be used for paying down debt.
Jefferies analysts said the sale price of the UK unit was above what most investors were expecting and that its disposal would refocus the company towards its high-growth U.S. business.
Revenue from Acadia's U.S. business grew by 7.6% in the third quarter ended Sept. 30 and accounted for 65.8% of the total revenue.
The sale would allow Acadia to have increased financial flexibility to help fund future expansion in the United States, Stephens analyst Scott Fidel said.
Waterland said in a statement it would merge Priory with its German rehabilitation healthcare unit Median after the closing of the deal, expected in January. The combined company will have a total of 570 facilities throughout Europe.
($1 = 0.7357 pounds)
(Reporting by Dania Nadeem in Bengaluru; Editing by Aditya Soni)