Q4-2018 Behavioral Health Update

The fourth quarter of 2018 capped an active year of private equity investment volume within the autism and substance use disorder sectors of behavioral health, with valuation multiples remaining at some of the highest levels within healthcare.

Consolidation activity, specifically within autism services, remained robust through the fourth quarter as new private equity firms invested into the sector while established platforms, such as LEARN Behavioral, were also active through acquisitions.

In the substance abuse vertical, outpatient MAT-provider focused platforms made headlines as Clearview Capital and Webster Capital’s platforms Community Medical Services and BayMark Health Services, respectively, continued to make add-on acquisitions throughout the United States. This is indicative of a broadening interest in including MAT as a component of drug treatment services.

In 2019, we anticipate valuation multiples to remain strong across all behavioral segments, with activity expected to increase as new investors enter the space and compete for add-on acquisition opportunities.

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Sources: SEC Filings; Company Press Releases, and Reports; IBISWorld; Capital IQ; PHP Estimates and Research. This document has been compiled with publicly available information. Provident Healthcare Partners, LLC makes no guarantee of its accuracy or completeness. No data or statement should be construed to be a recommendation for the purchase, sale, or retention of any security.