The Deals That Will Shape Behavioral Health Investments in 2022

Dealmaking has made behavioral health one of the most interesting segments of the healthcare industry. And 2022 was no exception even after a historic 2021.

Behavioral Health Business identified a handful of deals that caught our eye as we look back at the year that was 2022. Not all of them are big-dollar blockbusters—although we have a few of them. These deals stand out because they’re iconic for the year or are in a category of their own in some way.

The parties to these deals range from titans in their respective spaces to upstart players. They also operate in several settings, including traditional facility-based care, the behavioral health technology space, and even the government space.

Regardless of size, setting or segment, this year’s list of the most interesting behavioral health deals reflects a vibrant future for the industry as a whole.

Optum acquires Refresh Mental Health

Although official details of the deal were never released, many speculated that Optum acquired Refresh Mental Health for over $1 billion. News of the deal broke in March.

The megadeal acted as a stylistic counter to outpatient mental health giant LifeStance Health Group Inc. (Nasdaq: LFST). Lifestance exited private equity ownership to the public markets in an IPO that closed in summer 2021.

The sale of Refresh Mental Health to Optum added to the health care and health services organization’s growing behavioral health offerings. At this point, it has already acquired or invested in AbleTo and Mindstrong.

It also represents another move by a payer to run a healthcare company, an increasingly common trend.

Refresh Mental Health is poised to integrate more closely with primary care providers, CEO Steve Gold said at a BHB conference. The company is also in a position to provide services to other Optum customers if they are identified as needing mental health services.

Akili Inc. An IPO goes public through a SPAC

Akili Interactive Labs went public through a special purpose company (SPAC) acquisition deal. The deal was announced at the end of January. At the time of the deal, Akili was valued at $1 billion. Akili closed the deal with Social Capital Suvretta Holdings Corp. I. in August. By then, the deal had collected $163 million in revenue.

The Boston-based startup created a prescription video game called EndeavorRx aimed at improving attentional function in children with ADHD. In 2021, the company received FDA 510(k) clearance for the technology. Research has also begun on the use of video game therapy for adults with depression.

Akili shares soared to $37.58 in August. As of December 15, Akili shares were trading at $1.63, a 96% freefall.

Public markets haven’t been particularly kind to the share price of recent behavioral health entrants, repeating some trends seen in 2021.

Talkspace Inc. (Nasdaq: TALK) went public with a SPAC formed by its current chairman Doug Brownstein’s investment firm, Hudson Executive Investment Corporation. It is down 94% from its high of $12.45 in February 2021 to $0.73 at the time of writing, according to data maintained by Yahoo Finance.

Talkspace is at risk of being removed. Inc. acquires One Medical

Technology, retail and logistics giant Inc. (Nasdaq: AMZN ) has discovered the next industry it may be looking for scale: ambulatory care. The company announced a deal to acquire hybrid primary care provider One Medical (Nasdaq: ONEM) for $3.9 billion.

The deal allows the giant company to continue to grow its efforts in healthcare. As of Wednesday, the company had a market capitalization of $931 billion and raised revenue of $365 million through September 2022. Amazon has been systematically moving into new segments and scaling giant offerings since it started as a book retailer. These include cloud and technology services business (Amazon Web Services), music and video streaming services and online sales fulfillment to name a few.

Amazon previously dealt in healthcare services with Amazon Health. The company put those efforts on hold after the One Medical deal was announced.

One Medical offers behavioral health services. At the start of the deal, its leaders announced plans to expand those offerings. Most recently, the company launched Healthy Mind, which is focused on mental well-being and resilience. The company first entered the behavioral health space in April 2020 with Mindset by One Medical, a virtual training program designed to help promote mental health.

The deal gives Amazon a direct line, albeit through a bit of a back door, into the behavioral health space.

ARC Health Series of Investments

ARC Health was an active acquirer in 2022. The company was born in 2021 after its predecessor Advanced Recovery Concepts received an investment from Chicago-based private equity firm Thurston Group.

Its deal history signals that this is yet another private equity-backed platform company making a consolidation play in the outpatient mental health space.

Based in Cleveland, Ohio, ARC Health announced six acquisitions in 2022 and named a new CEO in August, Vincent Mora. The most recent deal was with Lotus Consulting, based in Ann Arbor, Michigan.

ARC Health currently has more than 320 psychiatrists, psychologists and therapists. Works with patients in Connecticut, Georgia, Michigan, Minnesota, New York, North Carolina, Ohio, Tennessee, Virginia and Washington, DC

When ARC Health was founded, Patrick J. Haynes III, CEO and chairman of Thurston Group, said it will have an aggressive growth strategy and is “poised to expand nationally.”

Headspace Health prefers to buy rather than build

Deals in the behavioral health tech space fell short of analysts’ expectations. However, record investment levels in 2020 and 2021 have provided plenty of capital to many startups and incumbents.

The San Francisco-based mental health and on-demand virtual behavioral health company announced two deals that build out targeted parts of its platform.

In January, Headspace Health acquired Francisco-based startup Sayana Inc. The deal gave Headspace more powerful AI tools, bolstered its self-help programs and added its ability to respond to registered users.

In September, Headspace Health acquired Shine Inc. The deal strengthens Headspace’s ability to access and serve diverse populations: 80% of Shine’s team identify as black, indigenous or people of colour.

The company launched a single entity for mental health and wellbeing in November. The new platform represents the merger of Headspace Health’s ancestors — Headspace and This deal ended in October 2021.

Action Behavior Centers sold to Charlesbank Capital Partners

NexPhase Capital LP has sold Austin-based applied behavior analysis (ABA) therapy provider Action Behavior Centers LLC to mid-market investment firm Charlesbank Capital Partners.

News of the deal broke in August. The deal reportedly valued Action Behavior Centers at about $840 million and at approximately a 14x multiple.

“It’s a period of time when a lot of people are talking about the autism business, when there’s been some discussion about some vendors stumbling a little bit,” Dexter Braff, president of M&A advisory firm The Braff Group, told BHB in an interview . “There was some discussion about the challenges and some consolidators stumbling a bit. … If I’m an ABA provider, I love this deal. That shows strength.”

This was one of the few big dollar deals in autism in 2022. It also reflects the hot odds that existed that year and in 2021. Although odds are expected to cool, they will remain high compared to historical averages, while trading volume remains elevated, experts say.

Action Behavior Centers is also interesting because it is large and fast growing. She made the Inc. list. 5,000 in 2022, reporting a revenue growth of 1,249% from 2018 to 2021.

Acadia Healthcare Co. Inc. acquires CenterPointe Behavioral Health System

Another rare blockbuster deal for 2022: Franklin, Tennessee-based Acadia Healthcare (Nasdaq: ACHC ) acquired CenterPointe Behavioral Health System. The latter operates four inpatient hospitals with 260 acute care beds, 46 specialty beds and 10 outpatient sites in the cities of St. Louis, Kansas City and Columbia in Missouri.

The deal showed Acadia Healthcare’s potential as an acquirer. After offloading its U.K. business, the company teased its intention to make consolidation plays in the U.S. Acadia is now the largest behavioral health provider in the U.S. And this talk of active growth and acquisition spanned two CEOs. But in his earliest days as CEO, Chris Hunter reiterated the company’s low leverage as an asset the company would rely on.

Hunter and other executives recently laid out a more comprehensive growth strategy that focuses more on building facilities independently and through joint ventures, as well as increasing the number of beds in existing facilities.

The acquisition of Monte Nido & Associates by Revelstoke Capital Partners

Monte Nido & Affiliates, a national provider of eating disorder treatment, sold to Denver-based healthcare-focused private equity firm Revelstoke Capital Partners in July.

Beverly Hills, Calif.-based Levine Leichtman Capital Partners previously owned Monte Nido. He made his first investment in 2015.

The deal to acquire Monte Nido reportedly values ​​the company at about $725 million, Axios Pro reports.

Candy Henderson, CEO of Monte Nido, told BHB that the company will look to expand through mergers and acquisitions and organic moves. At the time of the deal, Monte Nido had five brands and 45 locations in 15 states.

Eating disorder treatment is highly specialized care that is difficult to access. Most of the new entrants into the space — which have received significant rounds of venture funding — are focused on digital services.

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