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In its most recent report on the state of mental health in the United States, Mental Health America (MHA) indicated that 1 in 5 adult Americans suffer from a mental health condition. Fifty six percent of those diagnosed with a mental illness…

In its most recent report on the state of mental health in the United States, Mental Health America (MHA) indicated that 1 in 5 adult Americans suffer from a mental health condition. Fifty six percent of those diagnosed with a mental illness are not able to receive treatment. MHA also found that depression among American youth is on the rise. Deaths by drug overdose have drastically increased, as the country finds itself in the midst of an opioid crisis. While behavioral healthcare infrastructure is improving, there’s still a long way to go.

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The good news is that the behavioral healthcare services industry is growing rapidly, thanks to increased awareness, favorable healthcare reform, and investments being made towards the consolidation of what was once a fragmented, lesser-known subdivision of the healthcare industry.

In the first quarter of 2017, the behavioral healthcare services sector captured the attention of both strategic as well as financial buyers. According to the M&A report on Behavioral Healthcare Services by Capstone Partners, the strategic buyers have come from both public and private companies, whilst the financial buyers are usually private equity groups seeking to expand their existing portfolios through further acquisitions. The report also noted that 2017 has already seen the announcement of 18 deals in its first quarter. At this pace, 2017 deal volume could end up exceeding the record deal volume seen in the past two years.

Provident Healthcare Partners observed that private equity investors such as MTS Health, and The Riverside Company, as well as treatment centres such as Walden Behavioral Health, have all made sizeable acquisitions this year. The acquisitions range from providers of licensed mental illness treatment, to de-addiction centres, to providers of treatment for eating disorders. Provident Healthcare Partners expects deal activity to increase through the year, as both demand and awareness continue to grow.

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