Psychiatric Solutions

In 1997, two former Hospital Corporation of America executives, Joey Jacobs and Bryce DeHaven, founded Psychiatric Solutions, Inc. (PSI). Initially, the company managed various outpatient psychiatric services. However, seeing a fragmented market, they pivoted in 1999 to a roll-up strategy: acquiring and operating freestanding psychiatric inpatient hospitals. This new focus on owning inpatient facilities became the core of their business. The company went public via a merger with PMR Corporation in 2002, listing on the NASDAQ. This event provided the capital to accelerate its acquisition-heavy growth model. PSI grew rapidly, owning or leasing 94 facilities by 2010. The playbook was to acquire hospitals and apply their operating efficiencies to increase profitability. This chapter culminated in a major liquidity event in 2010 when Universal Health Services (UHS) acquired Psychiatric Solutions for approximately $3.1 billion, including the assumption of debt. The deal made UHS the largest operator of inpatient psychiatric care in the United States.