The latest data from M&A advisory firm The Braff Group shows a significant increase in autism-related deals in the first quarter of 2025. The quarter saw a 100% surge in deals compared to the previous quarter, marking the highest volume since Q4 of 2020. Overall, behavioral health deal volume also picked up in Q1 after a two-year lull, with a total of 52 deals closed during the period.
Dext Braff, president of The Braff Group, noted that all health care services deals experienced a 20% increase over Q4 of 2024, with behavioral health leading the way. The rise in behavioral health deals was particularly notable, with a 53% increase compared to the previous quarter, making it the second-highest output since Q1 of 2022.
In addition to autism-related deals, mental health deals also saw a notable increase in the first quarter of the year, with 19 deals closed. Deals in the substance use disorder (SUD) and intellectual and developmental disability (IDD) category also showed an uptick quarter over quarter.
Despite the positive numbers in Q1, the future of behavioral health dealmaking remains uncertain due to volatile markets. Factors such as potential tariffs and cuts to Medicaid under the Trump administration have added to the industry’s uncertainty.
However, there is optimism that buyer needs will offset some of the economic and legislative turmoil in the coming months. Private equity buyers, in particular, are expected to play a significant role in driving deal activity in the behavioral health sector.
In the midst of market volatility, privately held companies may become more attractive investment options for those looking for stability. Steve Garbon, managing director of behavioral health and health care staffing at The Braff Group, highlighted the potential for privately held companies to offer a safer investment alternative during uncertain times.
Despite the challenges posed by Medicaid coverage, tariffs, and a potential recession, certain business types like behavioral health and autism services may fare better due to high demand and less price sensitivity from customers with commercial insurance coverage. Private equity investors are showing interest in companies that fit this model, signaling a potential shift in investment focus towards resilient sectors in the healthcare industry.
