Lee Equity Partners acquired a majority interest in Bradford Health, an operator of substance use disorder treatment centers based in Birmingham, Alabama.
Why it matters: While many health care deals aren’t closing in a hurry today, Bradford is another data point that reflects both the ability to transact in the lower middle market, where lining up financing isn’t as challenging.
Getting closer: Axios wrote in april that a sale process was underway for Bradford, whose EBITDA sources were pegged at about $20 million to $30 million at the time.
- The deal provides an outlet for Center Partners, which backed Bradford in mid-2016.
- Harris William and Coker Capital advised Bradford, while Fifth Third and Comvest provided financing for the transaction. Terms were not disclosed.
- Bradford has a network of 40 substance abuse treatment and recovery centers in five states.
the intrigue: Bradford boasts of being “an early pioneer in value-based behavioral health care reimbursement.”
Of note: Lee’s investment marks a return to the substance abuse treatment industry for the company, whose past success and experience make it a logical suitor.
- Lee and FFL Partners jointly invested in Summit Behavioral Health in 2017, transferring the business in September 2021 to Patient Square Capital at a $1.3 billion valuation.
- The deal produced a 4x return for both companies, sources told Sarah at the time.
💠Sarah’s Thought Bubble: Investors in healthcare services are trying to figure out the “new normal” when it comes to valuations.
- The behavioral health benchmark people are really waiting for? Pinnacle Treatment Centers by Linden Capital Partners, a much larger addiction treatment provider today at stake through Lincoln International.
State of the situation: Bradford’s trade reflects the sustained appetite for private capital to address the underserved behavioral health market. Other notable behavioral health physical education bets this year include:
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