The agreements that defined investment in behavioral health in 2022

The deal has made behavioral health one of the most exciting segments of the health care industry. And 2022 was no exception, even after a historic 2021.

Behavioral Health Business has identified a handful of deals that caught our eye as we look back on the year 2022. Not all of them are huge blockbusters, although we do have a few of them. These deals stand out because they are iconic of the year or were in a category of their own in some way.

The parties to these deals range from titans of their respective spaces to upstarts. They also operate various settings, including traditional facility-based care, the behavioral health tech space, and even the government space.

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

Optum acquires Refresh Mental Health

While official numbers for the deal were never released, many speculated that Optum acquired Refresh Mental Health. for more than $1 billion. News of the deal broke in March.

The mega-deal acted as a stylistic counterpoint to outpatient mental health giant LifeStance Health Group Inc. (Nasdaq: LFST). Lifestance exited private equity ownership to public markets in an IPO which ended during the summer of 2021.

The sale of Refresh Mental Health to Optum added to the health care and services organization’s growing behavioral health offerings. At that time, I had already acquired or invested in AbleTo and Mindstrong.

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

Refresh Mental Health is ready integrate more closely with primary care suppliers, CEO Steve Gold said at a BHB conference. The company is also positioned to serve other Optum clients if they are identified as needing mental health services.

Akili Inc. Initial Public Offering Goes Public Through SPAC

Akili Interactive Labs went public through a special purpose acquisition company (SPAC) agreement. 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 made $163 million in profit.

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

Akili’s shares rose to $37.58 in August. As of December 15, Akili shares are trading at $1.63, a 96% free fall.

Public markets have not been very kind to the share price of recent behavioral health entrants, echoing some trends seen in 2021.

Talkspace Inc. (Nasdaq: TALK) went public with a SPAC formed by its now-chairman Doug Braunstein’s investment firm, Hudson Executive Investment Corporation. It is down 94% from its February 2021 high of $12.45 to $0.73 as of this writing, according to data maintained by yahoo finance.

talkspace is on risk of being excluded. Inc. acquires One Medical

Tech, retail and logistics giant Inc. (Nasdaq: AMZN) has found the next industry to look for scale in: ambulatory healthcare. It announced an agreement to acquire hybrid primary care provider One Medical (Nasdaq:ONEM) for $3.9 billion.

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

Amazon had previously dabbled in healthcare services with Amazon Health. the the company has abandoned that effort following the announcement of the One Medical deal.

One Medical offers behavioral health services. Before the deal, its leaders announced plans to expand those offerings. Most recently, the company launched Healthy Mind, which focuses 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 back door, into the behavioral health space.

ARC Health Investment Series

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

Their deal history indicates this is another private equity-backed platform company making a consolidation play in the outpatient mental health space.

Headquartered in Cleveland, Ohio, ARC Health announced six acquisitions in 2022 and named a new CEO in August, Vincent Morra. his last deal he worked at Lotus Consulting, based in Ann Arbor, Michigan.

ARC Health currently has more than 320 psychiatrists, psychologists and therapists. He 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 would have an aggressive growth strategy and was “prepared to expand nationally.”

Headspace Health chooses to buy rather than build

Offerings in the behavioral health tech space fell short of analyst expectations. However, record levels of investment in 2020 and 2021 have given many startups and incumbents ample capital.

The San Francisco-based virtual on-demand behavioral health and mental wellness company announced two deals that developed specific parts of its platform.

In January, Headspace Health acquisition Francisco-based startup Sayana Inc. The deal gave Headspace stronger AI tools, bolstered its self-help programs and increased its ability to respond to user registrations.

In September, Headspace Health acquired Shine Inc. The deal bolsters Headspace’s ability to access and serve diverse populations: 80% of Shine’s team identifies as Black, Indigenous or people of color.

The company launched a unified mental health and wellness business in November. The new platform embodies the merger of Headspace Health’s parents: Headspace and That deal closed in October 2021.

Action Behavior Centers sells to Charlesbank Capital Partners

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

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

“This is a period of time where there have been a lot of people talking about the autism business where there have been some discussions about some vendors stumbling a bit,” Dexter Braff, president of the M&A consulting firm, told BHB. The Braff Group. In an interview. “There has been some discussion about the challenges and some consolidators have been a bit shaky. … If I’m an ABA provider, I like that deal. Show strength.”

It was one of the few high-value deals in the autism space in 2022. It also reflected the hot multiples that have existed this year and in 2021. While multiples are expected to cool, they will remain high compared to historical averages as turnover remains highthe experts say.

Action Behavior Centers is also interesting because it’s big and growing fast. Made the Inc. 5000 list in 2022 by recording revenue growth of 1,249% from 2018 to 2021.

Acadia Healthcare Co. Inc. Acquires CenterPointe Behavioral Health System

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

The deal showcased the power of Acadia Healthcare as an acquirer. After Ditch your UK businessthe company scoffed at its intention to make consolidation plays in the US Acadia is already the largest pure behavioral health provider in the US, and this active growth and acquisition conversation has spanned two CEOs. But in the early days as CEOChris Hunter has reiterated the company’s low leverage as an asset the company would lean on.

Hunter and other CEOs recently explained a broader growth strategy which focuses more on building facilities on its own and through joint ventures, as well as increasing the number of beds in existing facilities.

Revelstoke Capital Partners acquires Monte Nido & Associates

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

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

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

Candy Henderson, CEO of Monte Nido, told BHB that the company would look to grow with M&A and organic moves. Monte Nido had five brands and 45 facilities in 15 states at the time of the deal.

Eating disorder treatment is highly specialized care that is difficult to access. Most of the new entrants in the space, which have secured major rounds of funding from ventures, focus on digital services.

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