Khrom Capital Says Research Suggests That Credible, Interested Bidders Exist For Acadia Healthcare; Believe That A Full Sale Of Acadia Healthcare As A Consideration Should Be A Top Priority For Board

Dear Members of the Board,

We are one of Acadia Healthcare Company, Inc.'s ("Acadia" or the "Company") largest shareholders, currently owning over 5 million shares of the Company's common stock ("Shares"), representing approximately 5.5% of the Company. We have now written to you multiple times to express our deep concerns regarding Acadia's persistent underperformance, poor capital allocation, misaligned executive incentives, governance failures, and lack of accountability.

Our private outreach has been met with nothing more than boilerplate responses—the same generic deflection that the Company issued in response to Engine Capital LP's September 24th letter. This is unacceptable. Shareholders deserve meaningful, urgent action to reverse Acadia's trajectory as one of the worst-performing healthcare stocks of the past decade as evidenced by Acadia's worst-in-class TSR.

It is unfortunate that it has come to the point where we and other shareholders, such as Engine Capital, have had to step in to call out actions that Acadia's Board and management should have already been taking to enhance shareholder value. To be clear, we support the proposals outlined in Engine Capital's September 24th letter. These are steps that the Board and management should have already considered and implemented as part of their management of the Company. However, we believe that shareholder trust in this Board and management team has eroded to such an extent that incremental measures are no longer sufficient.

We believe that the Board must immediately initiate a formal strategic review process, including the evaluation of a sale of all or part of the Company. Our research suggests that credible, interested bidders exist. Yet Acadia has refused to initiate a strategic review process. This refusal is troubling, and shareholders deserve a clear explanation for why the Board will not commence a strategic review process to determine whether it represents the best path to maximizing shareholder value.

Of course, operational improvements—such as those proposed by Engine Capital—should continue in parallel. However, the Board's fiduciary obligations require that it consider and evaluate in good faith all avenues for value creation for its shareholders. We believe that the Board refusing to run a strategic review is, at best, negligent—and at worst, a breach of its fiduciary duties.