According to the Centers for Disease Control and Prevention, as of June 2020, 13% of Americans reported starting or increasing substance use as a way of coping with stress or emotions related to COVID-19.
This uptick in substance abuse appears to be driving the Behavioral Health Care (BHC) deal market with a notable increase in deals targeting substance abuse treatment centers and providers. In the last two months, 77.7% of our BHC deals have involved the purchase of addiction treatment centers — but during the same time period (June through mid-July) in 2020 and 2019, about 56% of the BHC deals included this specific target type.
Most recently, BRC Healthcare, a portfolio company of Veronis Suhler Stevenson and NewSpring Health Capital, acquired a portfolio of four treatment centers in Nashville, Tennessee. This includes Nashville Recovery Center, NRC Clinical, Nashville Detox Center and Tennessee Recovery Clinic. Founded in 2018, these four companies offer a full spectrum of clinical services and sober living for people recovering from addiction. Ryan Cain and Darren Hobbs, the founders of the portfolio, will continue to hold management roles within BRC Healthcare with responsibility for day-to-day operations.
In the same week, Kolmac Outpatient Recovery Centers acquired Concerted Care Group, which has four treatment centers focused on substance abuse throughout Maryland. The combined business will be able to open sites in new markets, expand its outpatient services to treat more patients, and increase its market share within its existing markets in the mid-Atlantic. Kolmac Outpatient Recovery Centers is backed by WindRose Health Investors and Inclusive Capital Partners. We believe we will continue to see deals like this come our way as more people seek the help they need as we round the corner of the pandemic.
