Revelstoke Capital Partners won the auction for Monte Nido & Affiliates, agreeing to acquire eating disorder treatment provider Levine Leichtman Capital Partners, various sources tell Sarah.
- Some of these people place a valuation around $725 million.
Why is it important: The COVID-19 environment has fueled a spike in hospitalizations for anorexia and other eating disorders among teens.
Driving the news: The Denver-based private equity firm signed the deal over the weekend, concluding a Harris Williams-led auction process that began late last year, sources say.
- Previously cited sources estimated pro forma EBITDA at around $50 million for 2022 (or $65 million with timelines), but one source adds that actual EBITDA is closer to $40 million.
The context: Monte Nido offers a variety of residential treatments, partial hospitalization, and intensive outpatient programs for the treatment of eating disorders, a common comorbidity of depression, and other behavioral health issues.
- Monte Nido was historically geared towards low and moderate acuity patients, a more competitive care setting in contrast to high acuity patients, but more recently diversified, sources say.
- The company has invested in more acute patient populations through its acquisitions of Walden Behavioral Care in September 2021 and the Arizona-based Rosewood Center for Eating Disorders in October 2020, the latter through which it also entered the South-East market. west.
- Monte Nido in July includes five different brands with 47 programs in 14 states.
Yes and: The Monte Nido deal comes after Revelstoke in January poured its money into another area of behavioral health, investing in addiction treatment provider Crossroads Treatment Centers alongside CDPQ.
State of play: Monte Nido follows the joint acquisition of the industry leader Eating Recovery Center by Apax and Oak HC/FT last fall. (ERC for its part has branched out into treating mood and anxiety disorders.)
- Sources at the time told Sarah the deal was valued at around $1.4 billion, with the company forecasting $91 million in pro forma mature EBITDA for 2021.
- Andy Cavanna of Apax and Andrew Adams of Oak HC/FT then spoke about the shortage of good providers in the market, highlighting the value of an omnichannel approach that encompasses both in-person and virtual care, especially when It’s about solving the country’s access problem. .
The bottom line: Sales processes seem to be taking a little longer in today’s turbulent market, but we continue to see private equity and venture capital flowing into various pockets of behavioral health – whether it’s the quiet bet on youth mental health from Vistria Group or AI-focused digital startup Wysa landing $20 million in Series B funding.
LLCP and Revelstoke declined to comment.
Claire Rychlewski contributed to this report.