Behavioral health company owners looking to sell their business may find the process to be similar to marriage, but with more commitment involved. The decision to sell a behavioral health company is not one to be taken lightly, as it can have significant implications for the future of the business and its employees.
During the Behavioral Health Business INVEST conference, industry experts shared their insights on the often-overlooked considerations of behavioral health transactions. Sam Himelstein, co-founder and CEO of Family Spring, emphasized the importance of always keeping the future of the company in mind, even if there are no immediate plans for an exit. Himelstein, along with Joshua Rosenthal, who sold his company Manhattan Psychology Group to ARC Health, and Kevin Taggart, managing partner at Mertz & Taggart, discussed the key factors to consider when selling a behavioral health company.
While the behavioral health dealmaking market has cooled since its peak in 2021, there are still aggressive investors and buyers in the space. ARC Health, for example, has completed numerous transactions since its launch, indicating a strong interest in acquiring behavioral health companies.
Rosenthal and Himelstein both stressed the importance of relationships in the selling process, highlighting that how you feel about a potential buyer may be more important than the financial aspects of the deal. Rosenthal shared that he ultimately chose to sell to ARC Health because of the positive feedback he received from other CEOs who had sold their companies to the same buyer.
Taggart advised behavioral health CEOs to create a competitive process when looking for a buyer, as this can help maximize the value of the deal. While it may be tempting to develop a rapport with a single buyer, Taggart cautioned that this could potentially leave money on the table.
For Himelstein, the decision to sell Family Spring is about improving resources for patient care and finding a buyer who shares his passion for psychotherapy. He emphasized the importance of finding an energetic fit with a potential buyer to ensure a successful transition.
Rosenthal, who took rollover equity in the sale of his company, expressed contentment with the decision a year later. He likened ARC Health to a parent and the other practices acquired by the company as his siblings, highlighting the support he feels in his new role.
In conclusion, selling a behavioral health company requires careful consideration and a focus on building relationships with potential buyers. By prioritizing the long-term success of the business and finding a buyer who aligns with the company’s values, owners can ensure a smooth transition and positive outcome for all parties involved.
