The past year has been unusual — to say the least — and the home health and hospice M&A landscape is no exception. While the hospice industry has continued to count strong deal numbers over the course of 2020, home health and home care have fallen far behind in their year-over-year deal tallies. The coming year, however, is poised for a comeback of deal flow for several reasons, including Medicare reimbursement changes and pent-up demand. The Year 2020 and COVID-19 In some ways, 2020 should have been a blockbuster year for home health deal-making. The transition to the Patient-Driven Groupings Model (PDGM) on January 1, initially set the stage for mass consolidation within the space. However, that expected M&A activity was curtailed significantly by the COVID-19 emergency beginning in Q1. Many of the small and mid-size agencies that were expected to hit the market never did. Agencies that were expected to struggle under the new payment model were suddenly given a lifeline through Medicare loans, the Paycheck Protection Program (PPP) and Provider Relief Fund grants. Additionally, travel restrictions and social distancing measures curbed buyers’ ability to conduct due diligence on possible acquisition targets, further slowing deal flow. So far, there have been 75 transactions across home health, home care, and hospice in 2020, Mertz Taggart data shows. In comparison, there were 79 deals just in the first three quarters of 2019, and 99 deals over the same period of time in 2018. Of the 75 deals that took place in 2020, 27 were home health related. The Comeback Ahead Despite ongoing COVID-19 disruptions, there are indications that 2021 will likely be a strong year for home health M&A. While this year has only seen 27 home health transactions in the first three quarters, this doesn’t tell the full story. A closer look reveals that eight deals have taken place during the third quarter of 2020. This is a rise from Q2, which only saw five deals. This suggests deal-making action is finally starting to heat up again due to pent-up demand. Among the deals that have taken place recently The Pennant Group Inc. (Nasdaq: PNTG) announced that it had acquired the assets of two home health agencies from Signature Healthcare at Home in July. The company remained active on the M&A front, later announcing its purchase of CMS Home Health Care, a Texas agency, in September. Around the same time, Actinium Healthcare Holdings — a Dallas, Texas-based investment firm — announced it had acquired Central Home Health Services of Texas Inc. in August. Additionally, several new deals have sprung up in the final few months of the year. Charter Health Care Group announced its acquisition of Vitality Home Healthcare and Heartwood Home Health & Hospice in October. Earlier that month, Bridges Health Services also announced a series of transactions with four home health and hospice providers. Over the past couple of years, hospice has dominated the M&A spotlight with home health taking a backseat in comparison. But with hospice acquisition targets dwindling, buyers are starting to turn to home health. The Medicare reimbursement increase, taking effect Jan 1., also places home health in a favorable position moving forward. As the number of COVID-19 cases continues to rise, there’s every reason to believe that the demand for home health care will increase. “COVID will ultimately increase home health utilization as payors look for safer, cheaper solutions,” says Cory Mertz, Managing Partner for Mertz Taggart. “More than ever, folks want to keep themselves and their families at home.” Cory Mertz, Managing Partner, Mertz Taggart Preparing for 2021 Despite the challenges relating to 2020 and the COVID-19 pandemic, many signs point to 2021 being a major deal-making year. The consumer preference for receiving home-based care is expected to continue well after the pandemic is over, which should bolster the sector for years to come. And if the deals picking back up in the last few months are any indication, it’s not unlikely that the industry could see record home health M&A activity in the year ahead.

While the COVID-19 pandemic seems to have the nation’s full attention, it’s not the only public health emergency taking American lives at an alarming rate. Amid the coronavirus, drug abuse — a deadly years-long problem for the country — is also on the rise. Isolation, job loss, and financial strain drive a growing number of people to use drugs with the CDC estimating a record-setting 75,500 drug-related deaths in 2020 if current trends continue. As a result, addiction treatment centers are seeing heightened demand, in some cases reporting as much as a 50% growth in services. While the spike is somber, it’s creating M&A opportunities for those on both sides of the deal. Seller opportunities For owners of substance use disorder (SUD) treatment companies, now may be a good time to sell their business. That’s especially true for those who see expansion opportunities but do not have the financial resources to do so, for smaller providers having trouble navigating COVID-19, as well as anyone looking to receive top dollar for their company. Given the heightened demand in the already hot addiction marketplace, private investors and strategic buyers are especially bullish on SUD purchases as of late. They have their eyes on deals that allow them to expand their service offerings and enter new markets. Additionally, some buyers are allowing for certain COVID-19 adjustments, according to Kevin Taggart, managing partner of Mertz Taggart, meaning they’re looking at not only whether providers were growing their businesses pre-pandemic, but also how they have responded since the pandemic began. While the adjustment can’t bring back missing revenue for that period, the adjustment would “normalize” the company’s value as if Covid had never happened. The one caveat is that the company needs to show that it is back to pre-pandemic levels. Buyer opportunities Opportunity in the SUD space is also ripe for prospective buyers with capital to spend, especially when compared to other sectors of the economy. That holds true even beyond the COVID-19 pandemic, with the future of the addiction treatment industry poised for growth, because the need for services is increasing and the industry has shown to be more resilient in difficult economic times. While the Northeast and California have seen the most noteworthy ribbon cuttings of late, smaller markets are responding to local needs, as well.  Mertz Taggart is also predicting that Q4 of 2020 will see the largest number of M&A transactions since Q4 of 2018, with momentum increasing for 2021. All of this is a positive sign for the long-term viability of the SUD treatment industry, with an estimated market spend of $42 billion per year. “Companies that provide excellent clinical care, keep their charts in order, and can maintain a high census with consistent referral sources will be in demand in 2021,” Taggart says. Kevin Taggart, Managing Partner, Mertz Taggart The bottom line is this: Whether you’re a buyer or a seller, it’s a great time to be in the SUD market. With 11 transactions in both the second and third quarters of 2020, it’s likely the industry will also see those numbers accelerate in the quarters to come. Trackbacks/Pingbacks BrightView Acquires Rebound Recovery Addiction Centers - […] with locations in Lexington, Paris, and soon to be Nicholasville …

VANCOUVER, BC, Dec. 15, 2020 /CNW/ – Numinus Wellness Inc. (“Numinus” or the “Company”) (TSXV: NUMI), a company creating an ecosystem of health solutions centered around developing and supporting the safe, evidence-based, accessible use of psychedelic-assisted psychotherapies (PAP), is pleased to announce the acquisition of Montreal-based Mindspace Psychology Services Inc (DBA Mindspace Wellbeing), a leader and pioneer in psychedelic programming. The agreement brings together the capabilities of two leading Canadian organizations to develop and scale delivery of evidence-based psychedelic-assisted psychotherapy to provide the highest quality patient outcomes. “Adding Mindspace to the Numinus platform will provide strong synergies for both companies,” said Dr. Devon Christie, Medical Director at Numinus and a MAPS-trained therapist for the delivery of MDMA-assisted psychotherapy. “The companies have similar values and complementary strengths, which make this a strong corporate and cultural fit. We are also proud to grow our presence nationally through this announcement.” “Joining the Numinus team is a natural choice,” said Dr. Joe Flanders, Founder and Managing Partner of Mindspace. “It’s an excellent opportunity for us to work closely with a partner that shares our vision and values. We are impressed by the depth and rigor of Numinus’ clinical team and their authentic commitment to finding meaningful, accessible, and sustainable solutions to the mental health challenges we collectively face”. “We’re very excited to be bringing the Mindspace brand under the Numinus umbrella,” said Payton Nyquvest, CEO of Numinus. “The combination furthers our stated mission and delivers on our prospectus. This is a first and major step forward in our plan for global expansion of revenue-generating clinics and virtual therapy with the objective of health and wellness for all. Today’s announcement sets a positive trajectory for making psychedelic-assisted psychotherapy more accessible to those in need.” Read the full press release here .

LEWISVILLE, TEXAS (PRWEB) DECEMBER 15, 2020 BayMark Health Services announced this week an exciting addition to their portfolio of Substance Use Disorder Services, Liberty Bay Recovery Center, a residential treatment facility in Portland, Maine. BayMark is well-known in the addiction treatment industry as the North American leader in Opioid Use Disorder treatment with more than 250 facilities across the continent providing a variety of treatment options including medication-assisted treatment, counseling, and both inpatient and outpatient withdrawal management services. That portfolio, until recently, included only one residential treatment facility in Bala, Ontario, Greenestone Muskoka. The addition of Liberty Bay is a gratifying one for the company whose mission to improve the lives of individuals with substance use disorders will be well-served by bringing both their clinical and administrative expertise into a new U.S. treatment space. Mertz Taggart was the sell-side advisor of this healthcare Mergers and Acquisitions transaction. Read the full details of the transaction via press release. Trackbacks/Pingbacks Behavioral Health M&A Quarterly Report: Q4 2020 – Mertz Taggart - […] network of more than 250 facilities across the United States and Canada. Mertz Taggart represented Liberty Bay in the…

LEWISVILLE, TEXAS (PRWEB) DECEMBER 17, 2020 BayMark Health Services recently announced its partnership with Recovery Pathways, an office-based opioid treatment (OBOT) provider with three locations in Western Pennsylvania. The programs, two of which are located in Washington, PA and the third in Monroeville, PA, offer medication-assisted treatment (MAT) for opioid addiction using buprenorphine-based medications in an outpatient, physician’s office setting. Buprenorphine-based medications include Suboxone®, Subutex®, and Zubsolv®. Recovery Pathways three convenient locations provide comprehensive treatment to patients with Opioid Use Disorder (OUD) from western Pennsylvania, Ohio, and West Virginia. BayMark now operates or collaborates with eight outpatient, office-based opioid treatment (OBOT) locations in Pennsylvania including Family Recovery Solutions in Central PA, as well as three MedMark Treatment Centers Opioid Treatment Programs offering both methadone and buprenorphine-based products, located east of Pittsburgh. All BayMark-affiliated facilities share a common goal, to improve access to comprehensive and compassionate treatment for individuals who wish to overcome opioid misuse. The outpatient, flexible services provided by OBOT’s allow patients to maintain their commitments and keep living their lives during treatment. Read the full press release here.

If you followed the home health, hospice and home care M&A in 2020, you saw a little bit of everything. For the very early part of this year, most buyers and sellers hit the pause button on dealmaking to observe how the COVID-19 pandemic would impact post-acute care and aging services providers. There were some smaller tuck-in transactions, but hardly any market-moving blockbusters. That changed toward the end of 2020. “This year really had it all,” Mertz Taggart Managing Partner Cory Mertz says. “And after a slow start, things began picking up in late summer. I now believe we’re on a record-setting pace for home health, hospice, and home care M&A activity headed into 2021.” Overall, there were at least 75 home health, hospice, and home care transactions during the first three quarters of 2020, Mertz Taggart data shows . While the fourth quarter is still underway, early indications show it should be a record quarter, ultimately putting 2020 in line with 2019 and 2018, despite a once-in-a-century public health emergency. “At the risk of playing the spoiler, Q4 will be a record quarter for M&A,” Mertz says. “And I would expect this momentum will carry well into 2021.” Cory Mertz, Managing Partner, Mertz Taggart ‘Hitting pause’ on Medicare certified home health Going into 2020, most industry insiders believed that the Patient-Driven Groupings Model (PDGM) would lead to a wave of consolidation, similar to the aftermath of the Prospective Payment System (PPS) in the 1990s. That didn’t happen. In response to the COVID-19 crisis and severe volume swings, the U.S. government tossed out a series of lifelines to support all varieties of health care providers. Those lifelines included the 2% Medicare sequestration suspension, the expansion of advanced payment from the U.S. Centers for Medicare & Medicaid Services (CMS), grants under the Provider Relief Fund and more. Thousands of smaller mom-and-pop home health agencies also utilized the Paycheck Protection Program (PPP) to stay afloat during this difficult time. Combined, all of those resources gave some potential sellers feeling the pressure from PDGM a financial boost. Other potential sellers didn’t end up selling because they didn’t want to disrupt patient care. “We didn’t feel the true impact of PDGM this year,” Mertz says. Cory Mertz, Managing Partner, Mertz Taggart That’s not to say home health dealmaking was nonexistent. Yes, there were fewer deals than in 2018 and 2019, but the first three quarters of 2020 saw at least 27 different transactions. In September, The Pennant Group Inc. (Nasdaq: PNTG) announced it had acquired CMS Home Health Care, a Texas agency with locations in Brownwood and Coleman. In August, Actinium Healthcare Holdings announced its acquisition of Central Home Health Services of Texas Inc. Earlier in the year, BrightSpring Health Services made a deal for Advanced Home Care’s home health and home infusion businesses. LHC Group Inc. (Nasdaq: LHCG) announced several new or expanded home health joint ventures throughout 2020. In riding out PDGM and COVID-19’s impact, many home health operators said they hit pause on all M&A action. Most reversed course toward the end of summer. “I’ve been selling home health agencies since 2006,” Mertz says. “I can’t remember a time when demand has been higher than it is now. Since July, we have received an incredible amount of calls from both strategic and financial buyers looking for home health assets.” The constant in a sea of change While home health M&A activity had its ups and downs, hospice never really cooled off. In fact, by the end of 2020’s third quarter, there were almost as many hospice transactions — 46 — as all of 2019. Despite the public health emergency, hospice multiples remained high as well. “If you are a hospice operator looking for an exit, there has never been a better time to consider a sale,” Mertz says. “Demand is much higher than supply right now, especially for larger hospices.” Cory Mertz, Managing Partner, Mertz Taggart The biggest hospice news to come out of 2020? That would assuredly be the industry-shaping mega-merger between AccentCare Inc. and Seasons Hospice & Palliative care. Currently, AccentCare is the fifth-largest home health provider in the nation, according to data from LexisNexis. Seasons is the fifth-largest hospice provider. In combining the two, the companies hope to create a diversified post-acute care powerhouse with more than $1.5 billion in annual revenues. “With these two organizations together, we have a rare opportunity to shape the future of skilled home-based care,” Steve Rodgers, CEO of AccentCare, said when the deal was first announced. “The new organization will bring together the expertise and vision needed to re-think patient-centered care in the home, and offer innovative solutions to the health systems and physician groups we serve.” That wasn’t the only major hospice deal, however. In November, Addus HomeCare Corporation (Nasdaq: ADUS) announced that it was buying Queen City Hospice and its affiliate, Miracle City Hospice, for about $192 million. “The Addus deal clearly reflects just how much companies are willing to pay for high-quality hospice assets,” Mertz says. “Queen City Hospice has an average daily census of about 900 and annualized revenues of about $56 million.” Hospice is likely to remain hot moving forward, thanks in part to new reimbursement opportunities the hospice Medicare Advantage carve-in and new direct-contracting models from CMS. Home care primed to take off Home care may soon become the new hospice. Over the past couple of years, health systems and payers have increasingly begun to recognize the important role non-medical in-home care service providers play in keeping people healthy, with study after study highlighting the impact social determinants of health have on overall wellness. Now, home care is being driven to the forefront even faster by emerging hospital-at-home and SNF-at-home programs, both of which require the kind of high-touch, low-cost support home care offers. Soon, there may even be additional payment models to support both models. “Traditional home health care payment will not be sufficient given these individuals will require a mix of both skilled home health care services and also home care assistance with activities of daily living,” David Grabowski, a professor in the department of health care policy at Harvard Medical School, told Home Health Care News in August . “The model will have to recognize these enhanced service needs.” Among the largest home care deals this year came in September, when the Providence Service Corporation (Nasdaq: PRSC) announced it had entered into a definitive agreement to purchase home-based care company Simplura Health Group for an enterprise value of $575 million. Another significant deal that included non-medical home care assets was the acquisition of Help at Home by Centerbridge Partners and The Vistria Group, two large PE firms. Prior to an official announcement, reports surfaced the Help at Home’s price tag was around $1.4 billion. Although home care is primed to take off in 2021, it did lag behind home health and hospice from an M&A perspective throughout 2020. That’s not linked to a lack of interest, but rather a shortage of scalable home care assets coming to market. Get ready for a big year ahead Even with the COVID-19 pandemic, it was an exciting year for home health, hospice and home care M&A . Next year has the potential to be a historic one in terms of deal volume, with the entire health care system looking to shift more

LAS VEGAS–December 21, 2020 –( BUSINESS WIRE )– Landmark Recovery  – announced the opening of a new in-patient drug and alcohol recovery treatment center in Las Vegas on Dec. 18. Landmark worked with Wellness Real Estate Partners (“WREP”), a private real estate company focused exclusively on investing in real estate leased to behavioral health companies. WREP facilitated the transaction by providing the capital necessary to acquire the real estate previously owned by  Las Vegas Recovery Centers  and entered into a long-term lease with Landmark. This is Landmark’s first acquisition deal within the recovery space, but they are not new to addiction treatment. Landmark owns and operates 6 other recovery treatment centers in Oklahoma, Indiana and Kentucky and is on track to open an additional 10 locations across the U.S. in 2021. Mertz Taggart provided sell-side services for Las Vegas Recovery Centers in the transaction . Landmark now operates in four states and plans to open 10 new locations in 2021. Read the full press release . Trackbacks/Pingbacks Behavioral Health M&A Quarterly Report: Q4 2020 – Mertz Taggart - […] in December. Mertz Taggart provided sell-side services for Las Vegas Recovery Centers in the transaction. Landmark now operates in…

HASBROUCK HEIGHTS, N.J., Jan. 7, 2021 /PRNewswire/ — Care Finders Total Care, LLC (CFTC) is pleased to announce the addition of another outstanding homecare agency to their Pennsylvania group of companies. ORI HomeCare follows on the heels of their recent acquisition of Union Home Care and provides an even deeper base for CFTC in the greater Philadelphia area. This partnership allows Care Finders Total Care, LLC to build on the two dominant service models offered in Philadelphia — the hourly and Family Care segment of the market — while expanding into the ODP waiver program. Pennsylvania continues to be an extremely important pillar of the CFTC growth strategy into 2021. Coverage in the Northeast now includes 19 offices in New Jersey, three offices in Connecticut, and nine offices in Pennsylvania. “The combination of ORI HomeCare and Union Home Care, in addition to Philadelphia Home Care Agency and At Home Quality Care, provides great strength for CFTC as the company continues to develop its presence in the Northeast region,” CareFinders CEO Jim Robinson commented. ORI HomeCare was represented on the sell-side by Mertz Taggart Read the full press release here.

NEW YORK–( BUSINESS WIRE )– Enhanced Healthcare Partners , a leading healthcare-focused private equity firm specializing in middle-market healthcare services businesses, is pleased to announce its investment in NeuroPsychiatric Hospitals , a leading provider of integrated healthcare for patients with acute psychiatric disorders and complex medical and neurological disorders. Founded in 2006, NPH utilizes an integrated model of care supported by an interdisciplinary team of healthcare practitioners to ensure the diverse needs of each of their patients are addressed. Unlike the traditional hospital emergency room or a psychiatric care facility where the clinical staff is not equipped to care for patients with both psychiatric and medical issues, NPH’s clinical staff have expertise across multiple disciplines including psychiatric, behavioral, neurological, and medical disorders. The funding from EHP will be used to advance NPH’s expansion efforts and strategic objectives. NPH currently has four locations in Indiana and plans to open additional hospitals in Arizona and Texas during the second half of 2020. EHP will partner with NPH Founder and CEO Cameron Gilbert, PhD, at this inflection point, and together they will continue to build upon NPH’s platform designed to meet the needs of this significantly underserved psychiatric and medical patient population. EHP and NPH have plans for further expansion nationwide. Read the full press release here. Trackbacks/Pingbacks Behavioral Health M&A Report: Q3 2020 – Mertz Taggart - […] equity firm Enhanced Healthcare Partners has invested in NeuroPsychiatric Hospitals, an acute care provider with four locations in Indiana.… Home Health Insights: It’s All About the Multiple (…Or Is It?) - [...] ‘Not So Fast’…There’s No Straight Answer....

DALLAS–(BUSINESS WIRE)–December 22, 2020 — Dallas-based AccentCare and Rosemont, Illinois-based Seasons Hospice & Palliative Care (Seasons), along with Advent International, the private equity sponsor of AccentCare, announced today they have finalized an agreement to combine their two organizations to better meet the growing needs for their services. The duo announced the intent to merge last month, and plan to move forward with a thoughtful integration now that the merger is complete. Providing the full continuum of post-acute care as a unified organization will simplify the complexity that comes with navigating multiple companies, benefiting physicians, payors, and patients alike. Above all, both organizations remain dedicated to providing great service and enhancing capabilities health system and other strategic partners can rely on to ensure quality care for their patients. Read the full press release press release here.

There has been talk lately about M&A activity in the home health industry, prompting questions from many practitioners about the process of valuing and selling a home health agency. The purpose of our “Insights” series is to address these questions and more. Before considering a sale, owners should be aware of the numerous factors that can make or break a transaction. In this article, we will focus on the most important issue of all: Trust. SELLER BEWARE In any transaction, it is paramount that the two parties trust each other. Without some level of trust, it will be difficult to move a transaction forward to closing. But what do we mean by trust? And why is it important? Certainly, we can’t expect the parties of a transaction to trust each other as they would a family member or close friend. However, when selling your home health agency, there are a number of critical questions you should ask: Does my company fit into the buyer’s strategic plan? This may be the most fundamental question of all. If you can’t understand why someone wants to buy your home health agency, you will likely find each step in the process to be more difficult to take than the last. Don’t be afraid to ask these questions directly to the buyer: • Have you acquired similar agencies in the past? • What is your plan to integrate my company into yours? • How does my company fit into your strategic plan? Is the buyer working in good faith to close the transaction in a timely manner? Or do they seem more interested in learning the details of my company? Does the buyer have the wherewithal to close on the transaction? • Do they have a fund established, a credit facility, or cash in the bank? • Can they secure the necessary funding if they plan to use a combination of debt and equity? • Do they have a track record of closing transactions in a timely manner? Will my legacy be carried on? For many owners, their agency represents a labor of love - they started not only to build a business, but to help others. If leaving something behind is important to you, make sure this question is answered to your satisfaction. Will my employees be treated well after the sale? Many small businesses have a family atmosphere where employees have been present through good times and bad; you will want to make sure they are taken care of. Ask this question specifically to the buyer. Valuable employees should be viewed as valuable assets to a future owner. Make sure this is the case. WALK A MILE IN THE BUYER’S SHOES Remember, there are two parties to the transaction. What will the buyer need from you in order to feel comfortable with the transaction? The buyer will have three main concerns: Have I been given information that is 100% complete and accurate? Buying a home health agency is a big decision for a buyer, and a lot of money is involved. Buyers need to feel comfortable that they have placed the appropriate value on your business. Complete and accurate financials are critical in this respect as they serve as the basis for calculating value. Most credible buyers will want confidence that the value they’re placing on your agency will hold up under the scrutiny (and expense) of due diligence. Will the seller continue to focus their energy on the business while the transaction is proceeding? Naturally, this process is time consuming and distracting. But if business falls off during the transaction, the buyer could come back and attempt to negotiate for a lower valuation, which would not be in your best interest. Maintain your focus on running the business to ensure a positive outcome for all parties. Are there any issues lurking in the shadows that could affect the value of the business? • Potential litigation? • Audit Risk? • Compliance or labor issues? A TWO-WAY STREET The further you go into a transaction, the more important the issue of trust becomes. If either party feels uncomfortable, the transaction is in jeopardy and significant time and money may have gone to waste. Communication is critical. Proceed cautiously - get all of your questions answered, and remember to see things from the buyer’s point of view. You have poured your heart and soul into building your agency. Make sure you walk away with more than just a big payday.

With demand for addiction treatment and mental health services continuing to surge, a busy fourth quarter capped off a record-setting year for mergers and acquisitions in the behavioral healthcare sector. A record 49 transactions in behavioral healthcare overall closed in the final three months of 2021, bringing the total number of deals for the year to 149, over a 34% year-over-year increase over the previous record high of 111 recorded in 2020. The subsector of addiction treatment saw a record number of deals completed in the quarter, and activity in mental health was near record highs, as well. “The data reflects what we are seeing with our clients,” said Mertz Taggart Managing Partner Kevin Taggart. “Demand for quality mental health and addiction treatment services remains sky-high, with the pandemic adding fuel to a marketplace that already was strong. This has resulted in record valuations for these providers.” Private equity accounted for 40 of the quarter’s 49 transactions, a figure that includes nine platform deals. The surge in M&A activity to close out 2021 is indicative of the number of sellers looking for an exit from the industry, a trend that Taggart said has been driven by two factors: pandemic-induced burnout and the lingering threat of an increase in the capital gains tax rate, which has been looming for more than a year, but still has yet to come to fruition. Looking ahead to the start of the new year, Taggart said many transactions targeted for year-end in 2021 will end up closing in the first quarter of 2022. Beyond those first three months of the year, however, deal volume is difficult to predict. “Demand will remain strong,” Taggart said, “but valuations could be tempered by rising interest rates, which the Federal Reserve has recently signaled may begin as early as the second quarter.” Note: Total industry transactions does not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry. Addiction Treatment A total of 30 deals in addiction treatment closed in the fourth quarter, eclipsing the previous high of 20 set in the second quarter of 2019. BayMark Health Services and Behavioral Health Group (BHG) alone combined to account for more than a third of the activity within the sector, completing nine deals: In November, BayMark’s AppleGate Recovery acquired East West Family Care, an office-based opioid treatment (OBOT) program in Nashville, Tennessee. BayMark then completed three deals in December. First, it announced the acquisition of Polaris Renewal Services, which operates two opioid treatment programs (OTPs) for adults in western Pennsylvania. The company then added Granite Recovery Centers, which has a pair of residential facilities and sober living homes in southern New Hampshire. Finally, BayMark completed an acquisition of Riverwood Group, a medication-assisted treatment provider, which added four new states to the company’s OTP portfolio. In October, BHG expanded its footprint in Rhode Island with its acquisition of the four OTPs owned by The Journey to Hope, Health & Healing, and entered Maryland with the acquisition of Phoenix Health Center. BHG then expanded its presence in Virginia with a deal to acquire Staunton Treatment Center. Finally, BHG closed out the year when they acquired an eight-state OTP, Center for Behavioral Health. Outpatient addiction treatment provider BrightView Health added five centers in Virginia to its network of 46 locations across four states with its acquisition of Right Path Treatment Centers in December. Tennessee-based outpatient treatment provider Cedar Recovery added Occupational Health Services East Knoxville, an OBOT facility previously owned and operated by Dr. James “Jake” Harrison. Community Medical Centers (CMS), the Arizona-based OTP operator with more than 40 clinics in nine states, acquired Medpro Treatment Centers. Mertz Taggart represented Medpro as its exclusive merger and acquisition advisory firm in the transaction. Private equity firm FFL Partners and Two Sigma Impact, the impact investing business of Two Sigma, meanwhile, acquired a majority ownership stake in CMS. Cobb County Community Services Board and Haralson Behavioral Health Services consolidated and integrated in December. The combined agency is now conducting business as Highland Rivers Health. Odyssey Behavioral Healthcare expanded its addiction and dual diagnosis treatment capabilities and added detoxification services with its acquisition of CIVIQ Health, the parent company of the Silver Pines and Steps to Recovery programs in Pennsylvania. Pyramid Healthcare completed a pair of transactions, acquiring The Bluff in Augusta, Georgia, and Atlanta Addiction Recovery Centers. Florida-based Regard Recovery announced its acquisition of fellow mental health and addiction treatment services provider JourneyPure, expanding Regard’s presence into Tennessee and Kentucky. Promises Behavioral Health announced in November it had completed a full recapitalization with New York-based investment management firm Assured Healthcare Partners, a platform deal that will allow Promises to resume its expansion plans. MindBeacon Holdings, a provider of digital therapy, closed an acquisition of all issued and outstanding shares of Harmony Healthcare, which provides mental health and addiction treatment for children, adolescents and adults in Nevada. Mindpath Health, a provider of outpatient treatment services, expanded into Ohio with a deal for four Vertava Health offices in Cleveland and Columbus. Mental Health Merger and acquisition activity in the mental health subsector remained strong in the fourth quarter, with 16 transactions announced. It was the category’s most active quarter of 2021 and a record-high, eclipsing the previous high of 15 transactions announced in the final quarter of 2020. Among the mental health-related transactions reported in the fourth quarter: New Perspectives Center for Counseling & Therapy was acquired by Refresh Mental Health. Mertz Taggart served as the exclusive M&A advisor for New Perspectives in the transaction. | READ: New Perspectives Center Director Tim Markwell reflects on working with Mertz Taggart Apax Partners and Oak HC/FT joined forces to acquire Eating Recovery Center and its portfolio of 30 centers across seven states from CCMP Capital for a reported $1.4 billion. Delic Holdings Corp. acquired Ketamine Wellness Centers Arizona, creating the largest chain of wellness centers providing ketamine treatments in the United States. Discovery Behavioral Health, which operates a network of mental health, substance use and eating disorder treatment centers, acquired Awakenings KC Clinical Neuroscience Institute, an outpatient mental health services provider in Prairie Village, Kansas. Florida-based Elite DNA Therapy Services widen its reach across the panhandle and northern parts of the state with its acquisition of Impact Behavioral Health. Two months after first announcing a merger, Headspace and Ginger closed the deal, creating a $3 billion mental health company. Lifestance Health, a publicly traded behavioral healthcare company, acquired Washington state-based Acuity Counseling. In addition to its aforementioned deal for four Vertava Health properties in Ohio, Mindpath Health expanded into Arizona with a deal for Metropolitan Neuro Behavioral Institute, which serves the greater Chandler, Arizona, area. Autism Services and Intellectual/Developmental Disabilities Just seven deals were announced in the autism and I/DD space, the fewest transactions in a quarter for the category since Q2 of 2020. The most notable deal among them was a $219 million Series B funding campaign for Elemy, the digital healthcare company formerly known as Sprout Therapy. The funding reflects a pre-deal valuation for the company of $931 million. Other deals announced in the autism and I/DD space in the fourth quarter include: OCI Holdings, which conducts business as Care Options for Kids and is backed by Ancor Capital Partners, acquired The Missing Peace Autism Therapy Center. CareSource, a not-for-profit, multistate managed care company, acquired The Columbus Organization, a provider of services for individuals with I/DD and behavioral health challenges in 13 states. The Center for Social Dynamics, a portfolio company of NMS Capital, partnered with South Sound Behavior Therapy in Washington state. H2 Health, a portfolio company of the healthcare-focused private equity firm Grant Avenue Capital, expanded its pediatric therapy service offerings with its acquisition of Great Strides Rehabilitation, adding applied behavior analysis therapy to H2 Health’s continuum of care. The Stepping Stones Group, a national provider of therapeutic, behavioral, autism, nursing and educational services for children, acquired Behavioral Learning Center, a therapeutic and behavioral health company based in California.