Psychiatric Solutions says subpoena no ‘deal killer’ for sale
News that behavioral healthcare company Psychiatric Solutions received a subpoena from the Justice Department during the first quarter of the year is not likely a “deal killer” for the Franklin, Tenn.-based company’s possible decision to sell itself, according to Frank Morgan, an analyst at RBC Capital Markets. In a May 10 filing with the Securities and Exchange Commission, Psychiatric Solutions reported that it is cooperating with the Justice Department in relation to “various documents relating to compensation, stock sales, option awards and option exercises for certain senior-level executives and a subpoena from the DOJ seeking various other stock-related documents including, but not limited to, communications with investment firms and investors,” the filing said. The news came on the same day Psychiatric Solutions reported its first-quarter earnings, which showed both increased revenue and operating income for the quarter. “I don’t necessarily think it would impede a transaction being completed here,” Morgan said of the federal investigation.