Behavioral Health M&A
A recent uptick in behavioral healthcare mergers and acquisitions and pent-up demand by private equity to transact has buyers both new and old appearing poised to hit the ground running in 2025.
A total of 37 transactions—26 traditional M&A deals and 11 growth deals—were reported in the fourth quarter of 2024, bringing the total for the year to a combined 155 transactions. The 11 growth deals in Q4 had a combined value of about $170 million.
Traditional M&A activity for 2024 was fairly consistent with the prior year. As 2024 came to a close, the volume of chatter among potential buyers from all corners increased, Mertz Taggart Managing Partner Kevin Taggart said.
“If you look at most active buyers, it's pretty well spread out,” said Taggart. “Buyers who had been sitting on the sidelines for a while reached out to us late in Q4 to catch up before the new year, and we're starting to see some of the old buyers who haven’t been as active the past couple of years show interest in looking at deals again. That's a positive sign. Overall, we’re very optimistic about 2025.”
The return to the White House of President Donald Trump for a second term could provide a catalyst for an increased flow in deals, with the Trump administration’s demonstrated preference for deregulation viewed as a positive for deal-making, Taggart said. With that being said, over the last few weeks things have been moving very quickly in Washington, which has given some buyers pause for certain sectors of behavioral health.
If behavioral healthcare M&A activity does ramp up in 2025, Taggart pointed to two subcategories that could be poised for a comeback: addiction treatment, which has several strategic buyers showing renewed interest in making acquisitions, and autism, where slightly new models are attracting the attention of different buyers.
Addiction Treatment M&A
Just 8 deals involving addiction treatment providers were reported in Q4, up from 6 deals reported in Q3. Overall in 2024, 36 addiction treatment provider transactions were announced, a modest increase from 2023, which saw 29 deals, but still an unexpectedly low total and a far cry from the halcyon days of 2021, in which 79 transactions were completed.
“If we look at the addiction subcategory, it was pretty anemic in 2023, and it was still slow in 2024,” Taggart said. “But I think that's going to rebound because some of the buyers that are coming back into space are more in the SUD side.”
Among those buyers making a splashy return:
Acadia Healthcare, which acquired 3 South Carolina-based opioid addiction treatment programs in October. The Franklin, Tennessee-based behavioral healthcare services company acquired Recovery Concepts, Recovery Concepts of the Carolina Upstate, and Clear Skye Treatment Center. Those programs were rebranded as Clinton Comprehensive Treatment Center, Easley Comprehensive Treatment Center and Ridgeland Comprehensive Treatment Center, respectively.
Other transactions involving addiction treatment providers in Q4 included the following:
Santé Center in Argyle, Texas, was sold to two staff members—Sam Slaton, MEd, LPC, MBA, MHSM, and Michelle Luttrell, MA, LMFT-S, MBA, MHA—and Keith Klein, MC, CPA.
Lawrence Medical Center acquired New Horizons Medical, which operates six clinic locations, as well as a mobile clinic.
Owner Resource Group, an Austin, Texas-based private equity firm, announced that ORG Opportunity Fund IV and its affiliates completed an investment in Purpose Healing Center.
Peace Medical in Oakland Park, Florida, was acquired by an undisclosed “healthcare professional with an existing general health practice,” according to a news release.
Mental Health M&A
The fourth quarter of 2024 saw 25 deals involving mental healthcare providers, bringing the total for the year to 99 transactions. When excluding growth deals, transaction volume in 2024 was down from the previous two years.
While there is still demand for medical outpatient and psychiatry practices, valuations for outpatient mental healthcare care facilities have come down slightly, Taggart said. Demand for counseling-only practices is down as well, he added.
Q4 deals involving mental healthcare providers included the following:
Carlyle Group-backed Odyssey Behavioral Healthcare, traded hands for the first time since 2018. JLL Partners acquired the platform in November. Odyssey provides facility-based behavioral health care that addresses substance use, eating, mental health, and process disorders.
American Health Partners announced a transaction for Unity Psychiatric Care in a private equity-backed strategic deal.
Los Angeles-based Amae Health announced that it raised $6 million through a partnership with nonprofit academic health system Cedars-Sinai Medical Center.
Clinica Family Health announced a merger with Mental Health Partners to form Clinica Family Health & Wellness.
CuraLinc Healthcare acquired the employee assistance program of Wellspring Family Services in a deal backed by primary investor Lightyear Capital.
Family of Kidz in Westbury, New York, acquired Milestones for Munchkins.
Private equity firm Fireside Strategic Corporation made an investment in South Lake Center for Self Discovery in Davidson, North Carolina.
Hightop Health, an outpatient mental health group, expanded its network of programs in the Atlanta area to 7 facilities with its acquisition of Georgia Psychiatry & Sleep in a private equity-backed strategic deal.
Neuronetics completed its previously announced acquisition of Greenbrook TMS.
Paramount Health Management acquired St. George, Utah-based Life Launch Centers and its four facilities in the state.
The Queen’s Health Systems has acquired O‘ahu-based Kahi Mohala from California-based Sutter Health Pacific. Kahi Mohala is the only freestanding, not-for-profit psychiatric hospital in the state of Hawaii.
Mental healthcare provider Resilience Lab announced an expansion of its services to include medication management and treatment of severe mental illness with its acquisition of AI-enable psychiatry provider Options MD.
Stella, an interventional psychiatry practice, acquired the 5 Utah wellness clinics of psychedelic-assisted therapy provider Numinus Wellness for $3.53 million in a private equity-backed strategic transaction.
Lynchburg, Virginia-based mental health provider Thriveworks acquired Synchronous Health, an AI-powered behavioral health company based in Nashville, Tennessee.
Autism and Intellectual/Developmental Disabilities M&A
After a slower 2023, the autism and intellectual/developmental disabilities (I/DD) subsector saw 7 deals announced in the fourth quarter of 2024 and 30 total deals for the year.
Major bankruptcies, large strategic ABA companies struggling, and wage inflation for registered behavior technicians (RBTs) were among the factors that have strained the autism and I/DD subsector in recent years, Taggart said.
"Many providers struggled post-COVID, but some of the dust has settled on that, and we expect it to continue to improve, as buyers are showing interest in jumping back in,” Taggart said. “We're also seeing some slightly new models in that space that I think are attracting some interest from different buyers.”
The following deals involving providers of autism and I/DD services were announced in fourth quarter:
Autism Spectrum Interventions acquired Los Angeles-based applied behavior analysis (ABA) therapy provider Quality Behavior Solutions in a strategic deal backed by private equity firm Fletch Equity.
Goldman Sachs Alternatives acquired autism therapy provider Center for Social Dynamics in a private equity platform transaction.
Helping Hands Family (HHF), a provider of ABA therapy, acquired Mission Autism Clinics (MAC). The 12 MAC facilities will transition to the HHF brand as part of the deal.
Living Innovations Home Care acquired Momentum, a Maine-based provider of shared living and other behavioral health services to individuals with I/DD.
Kelly, a workforce solutions provider, acquired Children’s Therapy Center. The childhood therapeutics company will be integrated into the Pediatric Therapeutic Services arm of Kelly's education workforce solutions provider, Kelly Education.
Proven Behavior Solutions, a provider of outpatient therapy services for Massachusetts children with autism, acquired Prism Autism Education & Consultation of Connecticut.
If you are interested, you can also download the Q4 2024 Behavioral Health M&A Report via the following link:
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