Ethema Health Corporation (OTC: GRST) announced on October 23, 2025, that it has signed a Letter of Intent (LOI) to acquire certain assets and entities of Addiction Recovery Care (ARC) in Kentucky. The acquisition includes inpatient facilities in Inez, Pikeville, Owensboro, and Ashland, as well as outpatient facilities in Prestonsburg, Mount Sterling, Louisa, Ashland, and Lexington. Additionally, the deal encompasses a psychiatric hospital, a pharmacy, a medical laboratory, and a rural health clinic. These addiction treatment and psychiatric facilities have a combined capacity of approximately 900 patients.
The purchase price will be funded with approximately 25% in cash, 25% in a vendor note, and 50% in equity-linked funding from the vendor. The cash portion will be raised through new equity issuance and proceeds from sale-leaseback transactions of certain ARC facilities, a strategy Ethema previously used to finance its Florida operations in 2023. Real estate transactions related to the acquisitions will remain outside the company but could generate substantial new equity.
To facilitate the acquisition, Ethema will create a new entity, NewcoARIA, which will hold the ARC assets along with Ethema's existing Florida and Kentucky treatment entities. NewcoARIA will initially be owned by Ethema, new investors, and the vendor. The company is likely to pursue an Initial Public Offering of NewcoARIA on a senior U.S. exchange, a structure designed to simplify the substantial acquisition without complicating Ethema's equity and debt structure. Total revenue from existing Florida and Kentucky entities is forecast at approximately $25 million for 2026, while revenues from the acquired assets are forecast to exceed $100 million in the same year.
Ethema CEO Shawn Leon stated, “The discussions that led to the signing of the LOI started in January 2025 and we are pleased to have finally reached an LOI agreement with ARC. The principle philosophy behind the proposal was that the combination of ARC’s assets with our ARIA Kentucky assets all operating under the ARIA brand, would create a statewide network of treatment facilities to not only service the entire state but to help steer the future of treatment in the state of Kentucky.” Leon added, “We will implement our highly regarded, responsible operating philosophy and procedures to NewcoARIA, operating at the highest level of safety and compliance as our overriding guiding principle, which results in the very best care possible for our clients.”
ARC CEO Tim Robinson commented, “Throughout our considerable discussion process we came to trust that our clients and staff would be best served by combining our assets with ARIA. We remain committed to our staff, our clients and the ARC mission and believe that this will continue under the ARIA umbrella. We look forward to getting through a challenging year and we believe that the proposed transaction will help put this behind us.”
The acquisition is subject to due diligence and regulatory approvals. For more information, visit www.ethemahealth.com.
