‘Long-term growth rates’ attract PE to mental and behavioral health: 6 deals

From therapy to educational resources to pharmacies, the mental and behavioral health sector is broad and developing. Private equity has picked up on the momentum, with several firms making investments in the segment.

Post-covid, the focus on the mental health of young people, students, workers and older people has come under much more scrutiny, Andy Parker, corporate finance partner at accounting firm Cooper Parry, told PE Hub.

“I see a continuing dealflow in the sector,” Parker said. “The tightly defined mental health services overlaps with many other areas of investment for private equity, for example occupational health, education services and physical health services.”

Jim Weight, managing partner of Weight Partners Capital, told PE Hub that healthcare overall is an attractive sector for investment, but “the mental health subsector has even greater long-term growth rates.”

Greater incidence and improved diagnosis of mental health conditions drive this momentum, according to Weight. Increases in reimbursement from public and insurance payors, as well as a greater willingness by private individuals to fund treatment where public funding is unavailable also boost the attractiveness of the segment.

For more mainstream investors, pockets of appetite include care delivery technology providers, as well as employer-funded mental health businesses that support staff wellbeing and avoid direct exposure to government funding or regulation, Weight said.

“We expect to see continued strong activity in these asset-lite segments by mainstream investors on top of activity in more complex parts of government-reimbursed mental healthcare by specialist healthcare investors over 2026,” he added.

In May, PE Hub reported seven deals in the mental and behavioral health sector. KKR, Clearview Capital and Northlane Capital Partners were among firms making moves in the segment.

Starting with the most recent, we have rounded up six deals from the last four months.

1. Sheridan buys ICANotes, the firm’s first investment in EHR software

In January, Sheridan Capital Partners announced the acquisition of ICANotes, a provider of electronic healthcare record software for the behavioral healthcare market, PE Hub exclusively revealed. The sellers were the ICANotes founders, brothers Richard and Don Morganstern.

Based in Baltimore, ICANotes develops cloud-based software that supports clinical workflows for psychiatrists, therapists, counselors, social workers and nurse practitioners primarily within the psychotherapy (talk therapy) segment of the market.

Behavioral healthcare professionals also use it in the treatment of substance-use disorder and post-traumatic stress disorder, and in couples counseling, group therapy and rehabilitation programs.

2. Renovus-backed Behavioral Framework picks up Autism ETC

Behavioral Framework, which is backed by Renovus Capital Partners, in January acquired Autism ETC, a Nashville-based provider of center-based applied behavior analysis therapy and autism diagnostic services.

Behavioral Framework is a provider of ABA therapy in Maryland, Virginia and Washington, DC.

Founded in 2007, Autism ETC operates five clinics across Tennessee and Arizona.

3. LDC invests in mental health support company myHappymind

LDC in January made a minority investment in myHappymind, a provider of digital mental health and wellbeing programs for schools.

Founded in 2017, Cheshire-based myHappymind delivers digital, interactive mental health content to over 1,900 schools across the UK. Its programs, including comprehensive libraries of ready-made lesson guides and resources, are designed to help schools, nurseries and families create a culture of positive mental wellbeing for children and young people.

4. Thurston Group-backed Arc Health picks up Clarity Counseling Center

Arc Health, which is backed by Thurston Group, acquired Clarity Counseling Center, an outpatient therapy-based practice in Wilmington, North Carolina. The deal was announced in November.

Arc Health is an Ohio-based community of mental healthcare providers.

With the addition of Clarity, Arc Health now includes 23 partner practices, operating 92 locations nationwide.

5. Carlyle completes buyout of Tarrytown Expocare Pharmacy from Sheridan

The Carlyle Group in November completed the acquisition of Tarrytown Expocare Pharmacy, an Austin-based long-term pharmacy, from Sheridan Capital Partners.

Sheridan will retain a minority ownership position.

Tarrytown is focused exclusively on serving the intellectual and developmental disability and behavioral health communities.

6. Baum-backed Level Education Group picks up health education firm Triad

Level Education Group, which is backed by Baum Capital Partners, in October acquired Triad, an Idaho-based provider of exam preparation, continuing education and career resources for behavioral and mental health professionals.

Headquartered in South Jordan, Utah, LEG is a provider of continuing education for mental health and nursing professionals.

Triad’s brands include AATBS, Academic Review, Gerry Grossman Seminars, Taylor Study Method and the Wellness Institute.

PE Hub expects more deals in the mental and behavioral healthcare sector in 2026.