Outpatient mental health provider ARC Health announced Tuesday the acquisition of youth and family mental health services provider Sasco River Center LLC.
Beachwood, Ohio-based ARC Health’s acquisition of Darien, Connecticut-based Sasco River Center is its second deal announced in the past three weeks, marking rapid early growth for the company.
On August 17, ARC Health announced that it had acquired Southeast Psych. Southeast Psych operates two locations in Charlotte, North Carolina, and one location in Nashville, Tennessee. It also focuses on youth mental health and its “sweet spot” is serving teens, young adults and their families, according to an August report. ad.
Financial terms of both deals were not announced.
Sasco River Center operates three locations in Connecticut and employs 60 providers in offices in Darien, Stamford and Wilton. The organization opened its flagship 9,000-square-foot de novo multidisciplinary center in Darien in January 2022, according to a news release.
ARC Health was formed following an August 2021 investment from Thurston Group LLC, a Chicago-based private equity firm. Thurston partnered with Advanced Recovery Concepts, an Ohio-based outpatient mental health provider, on the move.
In partnership with Thurston, ARC Health aims to partner with like-minded providers across the country as part of its aggressive growth strategy, according to Prior Commercial Behavioral Health Coverage.
“ARC can provide the administrative support and economies of scale we need to grow, freeing our team to do what they love best, helping our patients be their best selves,” Chris Bogart, Co-Founder and Co-Director of Sasco River. Center, said in a press release.
And even with the two deals less than a month away, ARC Health likely isn’t done adding to its platform. The company is seeking deals “with leading mental health providers in attractive geographies,” according to a statement.
The deal also comes at a time when trading and investing in the behavioral health space is coming off a wild ride in 2021.
The Braff Group mergers and acquisitions consultancy tracked 251 deals in 2021approximately 33% more than another very good year for trading in 2020. In the first half of 2022, The Braff Group recorded 102 transactions, approximately 20% less than in the same period last year.
However, private equity deals, such as PE-backed ARC Health buying Sasco River Center, are not lagging behind in 2021.
“While sponsored transactions are down, they are only down 11.4% from last year,” The Braff Group wrote in a recent report. “But if we break it down between market entry platform deals and follow-ons, the data tells us a bit more. While platform volume is down 28.6%, follow-ups are lagging just 5.6% behind 2021.”
The report also states that it is “nothing unusual” for private equity firms to opt for more follow-on transactions, rather than expensive platform transactions, in times of crisis. increased economic uncertainty.
Other data from the firm Mertz Taggart confirms the drop in recent behavioral health deals. Nevertheless, business flows continue in a health clip in the sectors of autism, intellectual and developmental disabilities and mental health in general.
For its part, the Thurston Group is targeting investments in the healthcare and related business services sectors. Some of his other portfolio companies include Options Medical Weight Loss, US Orthopedic Partners, and Smile Doctors.
