Private Equity Health Care Acquisitions – December 2021

In light of the growing investor interest in health care and the risks associated with private equity ownership of health care companies, the Private Equity Stakeholder Project will be tracking private equity-backed health care acquisitions. Below is a list of private equity health care buyouts and add-on acquisitions completed or announced during December 2021. We will continue to track acquisitions on a monthly basis.

See November 2021 acquisitions here.

Behavioral health remains a popular investment target for private equity investors, with at least 10 deals in December. This is part of a growing trend of private equity in the space, which includes mental health, addiction treatment, and autism services. According to data provider Pitchbook, “No other major healthcare provider space has seen such explosive growth in the past five or so years.”[1]

Investment in behavioral health is expected to continue growing in 2022. “In mental health, an explosion of platform activity since 2020 foretells accelerated consolidation in the years to come,” writes Pitchbook. “…By contrast, [Substance Use Disorder] treatment, the oldest behavioral health segment, should see another wave of private equity investment start as platforms that last transacted in 2015 through 2018 return to the market, and may begin to enter the early stages of platform consolidation in the coming years.”[2]

December’s private equity behavioral health deals include American Securities’ acquisition of FullBloom (fka Catapult Learning[3]), an educational services platform that provides academic intervention, special education programs, and behavioral health services for K-12 students. FullBloom operates in 41 states and Washington, DC, and has at least 7,800 employees, making this one of the largest behavioral health transactions of the year.[4]

American Securities has come under fire for its ownership of prison telephone and communications provider Global Tel Link (GTL), which has faced scrutiny for exorbitant phone and video-calling rates, flaunting legal protections, allegedly conspiring to bribe government officials.[5]

December Behavioral Health Acquisitions

BayMark Health Services, which is owned by private equity firm Webster Equity Partners,[6] acquired Riverwood Group and Granite Recovery Centers. Riverwood Group is a medication assisted treatment (MAT) provider operating in Arkansas, Florida, Illinois, Indiana, Kansas, Nebraska and South Dakota.[7]  Granite Recovery Centers is a New Hampshire-based addiction treatment provider.[8]

BayMark is the largest provider of Opioid Use Disorder (OUD) services in North America, with more than 300 addiction treatment facilities in 35 states and three Canadian provinces.[9] Webster Equity created BayMark as a platform company in 2015 by buying and merging BAART Programs and MedMark Services, and has since made numerous acquisitions of smaller regional addiction treatment providers.[10]

The outsized returns targeted by private equity investors over relatively short periods of time pose risks to quality of care at private-equity-owned behavioral health providers. Risks may include inadequate staffing or reliance on untrained and unlicensed staff, pressure on providers to provide unnecessary and costly services, or abuse of federal funding programs at the expense of patient care.[11]

See our report: Understaffed, Unlicensed, and Untrained: Behavioral Health Under Private Equity

December Private Equity Buyouts

December Add-On Acquisitions

[1]https://files.pitchbook.com/website/files/pdf/PitchBook_Analyst_Note_Established_Private_Equity_Healthcare_Provider_Plays.pdf#page=1 pg. 10.

[2]https://files.pitchbook.com/website/files/pdf/PitchBook_Analyst_Note_Established_Private_Equity_Healthcare_Provider_Plays.pdf#page=1 pg. 13.

[3]https://fullbloom.org/2020/01/20/catapult-learning-unveils-new-parent-company-brand-fullbloom/

[4]https://www.american-securities.com/en/companies/fullbloom

[5]https://pestakeholder.org/report/american-securities-big-bet-on-prison-phone-calls/

[6]https://websterequitypartners.com/portfolio/baymark/

[7]https://www.prweb.com/releases/baymark_acquires_riverwood_group_llc_opioid_treatment_programs/prweb18411131.htm

[8]https://www.eagletribune.com/news/granite-recovery-centers-acquired-by-national-provider/article_2f14c638-6a74-11ec-8981-bbe8fa6ef173.html

[9]https://www.prweb.com/releases/baymark_acquires_riverwood_group_llc_opioid_treatment_programs/prweb18411131.htm

[10]https://webcache.googleusercontent.com/search?q=cache:EkDVvmi9T_sJ:https://www.pehub.com/webster-shelves-baymark-auction-eyes-further-growth/+&cd=3&hl=en&ct=clnk&gl=us

[11]https://pestakeholder.org/wp-content/uploads/2020/09/PESP-behavioral-health-9-2020.pdf