Behavioral Health Prognosis Calls for Consideration
Dealmaking in the mental and behavioral health space continues to grow, even as some other sectors face headwinds. Investor interest—particularly from private equity consolidators—has remained strong, driven by resilient demand and structural shifts in care delivery.
Telehealth’s Lasting Influence
The mental health segment, which spans outpatient services, substance use disorder (SUD) treatment, autism care, and more, has seen consistent investor enthusiasm since the height of the Covid-19 pandemic. One reason? The rapid normalization of telehealth. Virtual care solutions opened new pathways for access, scale, and efficiency—features investors love.
Addressing the Opioid Crisis
Demand for substance use disorder treatment shows no signs of slowing. Amid the ongoing opioid epidemic, providers are struggling to keep up. According to a February 2023 KPMG report, transactions involving SUD treatment centers have historically made up over 40% of all deals in this sector—underscoring the urgency and opportunity in this space.
Platform Building Continues
Several notable deals have made headlines recently. In March 2024, HCAP Partners LLC launched PAX Health LLC, a Red Bank, N.J.-based platform, by merging three behavioral health organizations: Behavioral Medicine Associates, Workers Compensation Psychological Network, and Reservoir Health. It’s a clear signal of ongoing appetite for consolidation.
Add-Ons Gain Momentum
In February, Concord Health Partners reported two key transactions across its behavioral health portfolio:
- Iris TeleHealth Inc., based in Austin and backed by Concord since 2022, acquired Erie, Pa.-based innovaTel, a telepsychiatry provider, from Quartet Health.
- NeuroFlow Inc., a Philadelphia company supported by Concord since September 2023, acquired the remainder of New York-based Quartet—an enablement company focused on behavioral health integration.
Meanwhile, Lee Equity Partners LLC is continuing to scale its behavioral health platform, Bradford Health Services LLC. In September, Bradford acquired Lakeview Health of Jacksonville, Fla., followed by its November purchase of Vertava Health, based in Southaven, Miss., from Summit Partners.
What’s Next? Our “Ripe for Exit” Spotlight
Our latest Ripe for Exit report shines a light on the behavioral health space, where many assets are nearing the end of their investment lifecycles—some held as long as nine years. In this spotlight, we explore:
- Top sponsors by acquisition year
- Entry enterprise value trends, with a heavy concentration in the $10–50M range
- A geographic heatmap highlighting portfolio activity across the U.S.
- A preview of assets that are likely to hit the market in the coming years
Private equity’s commitment to behavioral health is no passing trend. Between growing demand, evolving care models, and strong exit potential, the sector continues to offer fertile ground for dealmakers. Explore the full report here.
