Psy­chi­atric So­lu­tions says sub­poena no ‘deal killer’ for sale

Modern Healthcare - - Late News -

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.

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