Universal Health’s Acquisition of Psychiatric Solutions

On May 17, 2010, Universal Health Services, Inc. (“UHS”) and Psychiatric Solutions, Inc. (“PSI”) announced that they had reached a definitive agreement whereby UHS will acquire PSI for a price of $33.75 per share in cash, or approximately $2 billion. Including the assumption of approximately $1.1 billion in PSI net debt, the total transaction consideration is approximately $3.1 billion. Cravath is representing UHS in connection with this transaction. The transaction was unanimously approved by the Board of Directors of UHS. PSI’s Board of Directors, acting on the unanimous recommendation of the Special Committee, has approved the transaction and recommends that PSI shareholders approve the merger. UHS expects to complete the transaction in the fourth quarter of 2010, subject to customary closing conditions, including regulatory approvals and approval by PSI’s shareholders.

The Cravath team includes partner Minh Van Ngo and associates Joseph D. Zavaglia, Brandon R. DeFrehn and Anish Monga on corporate matters; associates Christopher D. Belelieu and Meredith A. Hendrix on antitrust matters; partner Stephen L. Gordon and associate Matthew Cantor on tax matters; partner Eric W. Hilfers and associate Edward S. Wei on executive compensation and benefits matters; and partner Jeffrey A. Smith on environmental matters.