Private equity companies are driving most behavioral health activity in 2017, as they continue to trade practices and build up regional platforms. Through March 28, 2017, 12 behavioral health care deals are on the books. Nearly 60% of these deals were announced by financial buyers, six of which were PE- backed behavioral health companies. One was a private equity firm and one a blank-check investment firm.
In April 2016, American Capital Ltd. (NASDAQ: ACAS) announced the sale of its portfolio company, The Meadows of Wickenburg, Inc., to Kohlberg & Company LLC, a New York-based private equity firm, for $180 million. Located in Arizona, The Meadows provides addiction and psychological trauma treatment services through inpatient, outpatient and intensive outpatient levels of care.
The Meadows, largely a private-pay program, had been with American Capital since 2006. In conjunction with the 2016 acquisition, Kohlberg announced the formation of Alita Care, LLC, which would be based in Phoenix, Arizona and serve as the parent holding company for The Meadows and Kohlberg’s existing portfolio company, Sunspire Health, LLC.
Alita Care announced its first acquisition on March 20, 2017, targeting Bournewood Health Systems for an undisclosed amount. Based in Massachusetts, Bournewood provides inpatient, partial hospital, and outpatient services for adults and adolescents with mental health and substance abuse conditions. The acquisition expands Alita’s treatment capabilities, particularly in acute psychiatric care. Bournewood will continue to operate as an independent brand within Alita.
As a result of this acquisition, Alita Care now serves as the parent company of three independently branded treatment providers and has 16 differentiated treatment programs throughout the country.
