Psychiatric Solutions Acquires Three Rivers Behavioral Health

FRANKLIN, Tenn.--(BUSINESS WIRE)--Jan. 4, 2007--Psychiatric Solutions, Inc. ("PSI") (NASDAQ: PSYS) today announced the acquisition of Three Rivers Behavioral Health, an 86-bed inpatient psychiatric facility headquartered in Columbia, South Carolina. Three Rivers produced estimated revenue for 2006 of $12.2 million and recently was awarded a Certificate of Need for an additional 32 beds, which will make it the largest inpatient psychiatric facility in the state when the expansion is completed in the second half of 2007. Andy Hanner, a co-founder of Three Rivers and its Chief Executive Officer, has joined PSI as President of the South Carolina Division.

"It is a pleasure to announce the completion of our first acquisition for 2007," remarked Joey Jacobs, Chairman, President and Chief Executive Officer of PSI. "This transaction brings PSI a high quality facility with an outstanding staff that has recently initiated a substantial expansion. We are also pleased that Andy Hanner, co-founder and CEO of Three Rivers, has joined PSI as a division president. We are gaining an experienced professional who is intimately familiar with both this expansion and the market opportunities for further growth in South Carolina. We welcome Andy and the Three Rivers team to PSI.

"This transaction is representative of continuing opportunities to acquire attractive inpatient facilities that are leaders in their markets and that have significant opportunities for further profitable growth. Consistent with our growth strategies, we expect Three Rivers to be accretive to our financial results, and we intend to continue evaluating additional potential acquisition transactions."

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements other than those made solely with respect to historical fact and are based on the intent, belief or current expectations of PSI and its management. PSI's business and operations are subject to a variety of risks and uncertainties that might cause actual results to differ materially from those projected by any forward-looking statements. Factors that could cause such differences include, but are not limited to: (1) PSI's ability to successfully integrate Three Rivers and other recently acquired operations; (2) PSI's ability to complete the acquisition of Horizon Health Corporation and to successfully integrate the Horizon Health operations; (3) potential competition which alters or impedes PSI's acquisition strategy by decreasing PSI's ability to acquire additional inpatient facilities on favorable terms; (4) the ability of PSI to improve the operations of acquired inpatient facilities; (5) the ability to maintain favorable and continuing relationships with physicians who use PSI's facilities; (6) the ability to receive timely additional financing on terms acceptable to PSI to fund PSI's acquisition strategy and capital expenditure needs, including financing for the acquisition of Horizon Health; (7) risks inherent to the health care industry, including the impact of unforeseen changes in regulation, reimbursement rates from federal and state health care programs or managed care companies and exposure to claims and legal actions by patients and others; and (8) PSI's ability to comply with applicable licensure and accreditation requirements. The forward-looking statements herein are qualified in their entirety by the risk factors set forth in PSI's filings with the Securities and Exchange Commission. PSI undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof.

PSI offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 75 owned or leased freestanding psychiatric inpatient facilities with more than 8,000 beds in 29 states, Puerto Rico and the U.S. Virgin Islands. PSI also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical/surgical hospitals owned by others.

CONTACT: Psychiatric Solutions, Inc.
Brent Turner, 615-312-5700
Executive Vice President, Finance and Administration

SOURCE: Psychiatric Solutions, Inc.