Behavioral health sector sees increased M&A activity

USA – The behavioral health sector experienced a surge in mergers and acquisitions during the first quarter of 2025, with over 15 deals signaling strong investor interest and sustained demand for services.

This momentum is expected to continue throughout the year as more providers scale and diversify their offerings. Technology remains a powerful driver of change in this space.

In January, Avel eCare acquired Amwell’s telepsychiatry business for US$ 21 million, while Iris Telehealth took over innovaTel, the telepsychiatry arm of Quartet Health, positioning itself as one of the largest telepsychiatry providers in the U.S.

Shortly after, behavioral health tech company NeuroFlow acquired the remaining parts of Quartet Health. By March, April Health, a virtual mental health provider, merged with AI-based support platform Wysa.

This merger aims to enhance patient care through a hybrid model that combines AI support with clinical care, reducing wait times and supporting patients between sessions.

Autism and applied behavior analysis (ABA) services also saw heightened activity. Already, Autism Health expanded into three new states with the acquisitions of Commonwealth ABA and CABS Autism and Behavior Specialists.

Meanwhile, Proud Moments ABA was acquired by Nautic Partners from Audax Private Equity.

In February, California-based Autism Spectrum Interventions and Quality Behavior Solutions merged to form Alongside, bringing together in-home and clinic-based care.

Devereux Advanced Behavioral Health further expanded its reach by acquiring Strawberry Fields, which enabled the company to offer services for individuals with intellectual and developmental disabilities, as well as those with serious mental health conditions.

Interest also surged in treatment areas such as eating disorders and substance use disorders. Meridian Behavioral Health in Minnesota acquired Gateway Recovery Centers, which operates detox facilities.

Orchard Mental Health Group expanded its footprint with the acquisition of six locations, including GBCC Behavioral Health and Oasis Behavioral Health Urgent Care.

A new behavioral health organization, Well Behavioral Health, was launched in February, bringing together four specialized providers to offer virtual care across nine states for eating disorders, OCD, anxiety, and mood disorders.

In March, Partners Behavioral Health expanded its services with the addition of four intensive outpatient centers through the acquisition of facilities from Nuway.

Additional high-profile deals included Oceans Healthcare’s acquisition of Haven Behavioral Healthcare and the US$ 395 million sale of Wellpath’s behavioral health division, approved by a federal bankruptcy judge.

BrightSpring Health announced plans to divest its community living business to Sentiva for US$ 835 million. PAX Health acquired Harris Psychiatric Services, known for treating injured workers.

The Stepping Stones Group, backed by Leonard Green & Partners, purchased Gallagher Pediatric Services, which provides physical and occupational therapy in California schools.