UPDATE 1-Khrom Capital urges Acadia Healthcare to explore sale

(Adds details from the letter throughout) Oct 1 (Reuters) – Khrom Capital Management, one of the largest shareholders of Acadia Healthcare, has called on the company's board to launch a formal strategic review, including a potential sale, citing years of poor performance and governance failures, the company said on Wednesday. In a letter sent to the Acadia board, Khrom Capital — which owns a 5.5% stake in the behavioral health provider — said that shareholder confidence in the company's leadership has eroded and incremental changes are no longer sufficient. The investor criticized the company's board for a lack of accountability, citing long director tenures, minimal stock ownership and delayed governance reforms. On September 24, activist investor Engine Capital also sent a letter to Acadia Healthcare's board asking the company to explore a potential asset sale and add new directors to its board. (Reporting by Siddhi Mahatole in Bengaluru; Editing by Alan Barona)

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