Q3-2020 Behavioral Health Update
In Q3, activity within the Behavioral Health M&A market continued the recovery seen in previous quarters. The market saw a considerable amount of activity within the medically assisted treatment and substance abuse sectors. Services within these sectors were particularly resistant to the economic downturn given their status as essential businesses. The quarter saw an influx of deals, primarily driven by PE backed platforms aggressively targeting regional addiction treatment providers within the SUD and MAT sectors as add-on acquisitions.
Despite some return to normalcy, the effects of the pandemic have had a lasting impact on the mental health space. Since the beginning of the COVID-19 pandemic, the percentage of Americans reporting symptoms of anxiety and depression, has increased three-fold and four-fold respectively. In addition to this, 13% of Americans reported increases in substance abuse to cope with the mounting stress brought on by the pandemic. As unemployment and job security continue to be issues these problems will persist.
Provident believes that rising demand for behavioral health services in the coming months will drive M&A activity and is expecting transaction volume to remain robust through the end of the year.
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