Q2-2022 Mental Health & Addiction Treatment Update
Q2-2022 was an especially strong quarter for M&A activity in the behavioral health space as increased incidence and awareness continue to drive growth within the sector. Due to outsized demand for services many investors and PE-backed platforms see an opportunity to improve efficiencies in the space. Providers look towards improving country-wide access to care through further add-ons to current platforms.
Outpatient and community-based mental health and addiction treatment continues to be front of mind for financial and strategic investors alike. As the COVID-19 pandemic placed increased emphasis on accessible care, those groups that offered an outpatient option experienced minimal business interruption as opposed to residential models. This trend, coupled with lower fixed costs associated with outpatient settings made these programs attractive M&A targets. Outpatient M&A activity outpaced by residential by over 22% in 2021.
Provident anticipates continued M&A growth in the sector primarily driven by add-on acquisition activity as major platforms continue to compete for attractive assets within the space.
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