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Illustration: Gabriella Turrisi/Axios

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.