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Universal Health Services Inc. said Monday that it will buy Psychiatric Solutions Inc. for about $2 billion in cash to help strengthen its behavioral services unit and grow its overall business.

The companies value the total deal at approximately $3.1 billion, which includes $1.1 billion in debt. Universal Health will pay $33.75 per share, which is a 3.4 percent premium over Psychiatric Services Friday closing stock price of $32.63.

Psychiatric Solutions of Franklin, Tenn., is the biggest operator of owned or leased freestanding psychiatric inpatient facilities, while Universal Health, based in King of Prussia, owns or runs acute care hospitals and behavioral health care facilities and schools.

Both companies' boards approved the transaction, which is expected to produce about $35 million to $45 million in annual cost savings within three years of closing. The majority of the savings are anticipated to occur in the first two years after the deal's completion.

The acquisition, which still need approval from Psychiatric Solutions' shareholders, is expected to close in the fourth quarter.

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