Realized Investment

CRC Health is America’s leading owner and operator of residential drug and alcohol treatment facilities and methadone clinics. The company had the opportunity to acquire the largest group of residential treatment facilities in Pennsylvania. However, access to capital was complicated by CRC’s lack of a financial equity sponsor, few tangible assets and concern about its ability to handle such an acquisition, which would triple the size of the business.

Caltius Mezzanine focused on the numerous positive aspects of the business. CRC’s management team had a proven track record. It had successfully integrated and improved the operating performance of three previous acquisitions, increasing patient census while controlling costs. Additionally, the chemical dependency treatment industry was rapidly growing.

Caltius Mezzanine provided subordinated debt capital, enabling CRC to complete the Pennsylvania acquisition at very favorable terms.  The following year, Caltius Mezzanine sourced an acquisition for CRC and provided additional capital, helping to double the size of the business.

“Caltius Mezzanine took the time to thoroughly understand our needs before presenting a creative financing plan. They contributed to our growth by presenting an attractive acquisition candidate, then financed our purchase of the company. Throughout the process the team employed the utmost integrity.”

Barry W. Karlin, Ph.D., Chairman & CEO, CRC Health Corporation