The Vistria Group quietly invested in Sandstone Care, a provider of behavioral health care for youth.
Why is the BFD: the Closures, isolation and consequences related to the covid-19 pandemicpaired with the growing use of social networks like Instagramhave had an enormous impact on the mental health of our nation’s adolescents.
- Vistria, an impact-oriented PE store, has been putting out breadcrumbs that point to its big intentions to help address the youth mental health crisis. With Sandstone, the firm is true to its words.
Details: Although a deal was not formally announced, Vistria now liza Sandstone, led by CEO Michael Hunter, as a holding company.
- With a presence spanning Colorado, Maryland and Virginia, Sandstone offers outpatient care for young adults and adolescents struggling with substance abuse and co-occurring disorders.
- That includes detoxification, adolescent residential treatment, long-term care, day treatment, intensive outpatient programs, sober living, and general outpatient programs.
Behind the scenes: Vistria, in response to the United States Surgeon General’s call for action on the youth mental health crisis, pledged $250 million in June toward investments in American providers of youth mental health services over the next three years.
- Meanwhile, sources tell Sarah that the Sandstone deal is valued at over $200 million. Two sources previously put the supplier’s EBITDA at around $12 million.
- Raymond James provided sell-side advice in a process that was never fully launched, the sources add.
What they are saying: Amy Christensen from Vistria spoke about the increased need for behavioral and mental health care and related investment opportunities. he told PE Hub in April:
“We have a particular focus on companies that work with children and adolescents, who have been disproportionately affected by the pandemic…”
- Christensen highlighted declining sigma and attractive repayment dynamics as attractive investment factors, along with growing demand.
The panorama: Chicago’s Vistria is a strong believer in the need for greater access to behavioral health care in various formats, with Sandstone arriving just months after its acquisition of Kalamazoo, Michigan-based Beacon Specialized Living.
- The settlement for Beacon, a community provider of treatment for people with serious mental illness, was valued at over $300 millionsources told Axios in March.
- Other current portfolio companies include BHG Recovery, an operator of opioid treatment centers and owned by Vistria since 2018; and Sevita, a community care provider for people with intellectual, developmental, physical or behavioral disabilities or other special needs. (Madison Dearborn bought 25% of Sevita at a valuation of about $3 billion, Axios reported in January)
What else are we seeing: results for other behavioral health offerings not yet developed: Center Partners’ Bradford Health Services, Levine Leichtman’s Monte Nido & Affiliates, and Housatonic Partners’ Embark Behavioral Health.
Vistria did not respond to requests for comment.
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