Behavioral health mergers and acquisitions have been on the rise in 2025, with a particular focus on deals within the autism sector. While some experts have noted a perceived quietness in the market, others attribute this to the nature of smaller transactions that may not garner as much attention.
Peter Lynch, an associate partner at Stoneridge Partners, a national healthcare M&A advisory firm specializing in behavioral health, emphasized that there is plenty of activity in the market, even if some deals are flying under the radar due to their smaller size. Larger transactions that typically draw more attention have also seen a cooling off period.
Agenda Health, a healthcare transaction advisory services firm based in Austin, Texas, echoed similar sentiments, highlighting the impact of public scrutiny and stakeholder perceptions on deal announcements. Alex Veach, director of transaction services at Agenda Health, explained that transaction announcements in smaller markets can have a significant impact on employee rosters and brand reputation, leading some players to opt for a quieter approach.
Kevin Taggart, managing partner of Mertz Taggart, a Florida-based advisory firm specializing in healthcare M&A, noted that private equity players are actively pursuing consolidation in the behavioral health space, but some are keeping their actions quiet due to state-level legislation and competitive pressures.
Looking ahead to the remainder of 2025, experts anticipate continued activity in applied behavioral analysis (ABA), substance use disorder (SUD) treatment, and telehealth. Dan Davidson, managing director at Northborne Partners, highlighted the increasing interest in tele-behavioral health and the diverse range of buyers in the market, including private equity investors and strategic value purchasers.
Consolidation is expected to focus on partial hospitalization programs (PHP) and intensive outpatient programs (IOP) for the rest of the year. Despite recent Medicaid cuts adding to uncertainty for providers, realistic valuation expectations will be key for successful dealmaking.
While some buyers may be wary of the impact of Medicaid changes, experts do not anticipate a slowdown in deal activity. The underlying need for behavioral health services continues to grow, presenting opportunities for providers to differentiate themselves and meet the rising demand for mental health services.
Overall, the behavioral health M&A market remains active and poised for a robust second half of 2025. With addiction rates on the rise and increasing demand for mental health services, investors are eager to deploy capital and drive growth in the sector.
