Private equity firm MKH Capital Partners has acquired Florida-based Haven Health Management, a mental health and substance use disorder (SUD) provider, in a nine-figure deal.
Haven Health Management operates 22 locations across nine states and Puerto Rico and has 2,000 team members. Its brands include Indiana Center for Recovery, The Haven Detox and The Recovery Team.
The brands offer a range of services, including substance use and dual-diagnosis treatment, transmagnetic stimulation, brain mapping, biofeedback medical detox, acute psychiatric care, residential and outpatient programs.
“We invested in Haven Health Management because it has already built what many organizations in behavioral health aspire to become: a high-quality, accredited, multistate platform with strong leadership, differentiated clinical offerings and meaningful insurance access,” Miguel Heras, founder of MHK Capital Partners, exclusively told Behavioral Health Business. “We saw an opportunity to support a company that is already making a difference and help it grow responsibly, without losing what makes it special.”
The deal also included MKH Capital Partners’ purchase of United Billing Solutions, a behavioral health-focused billing organization, aimed at enabling in-network billing for Haven’s brands.
MKH Capital Partners is a family office targeting transactions from $10 million to $200 million. Its investments include fertility services, security services, a car wash company and an esthetician franchise.
Following the acquisition, the provider plans to add additional in-network partnerships with health insurance companies and expand into new markets. The company will open new locations under the Haven Detox brand next year.
In addition to the deal, the company has named Brian Thorn its new CEO. Thorn has extensive experience in the SUD space, previously serving as COO of Pinnacle Treatment Centers and Foundations Recovery Network.
“I joined Haven Health Management because its mission felt very real to me,” Thorn told BHB. “Throughout my career, I’ve believed our responsibility is to remove barriers to treatment, meet people where they are and help as many people as possible access life-saving care. I saw an opportunity to be part of an organization with both heart and momentum.”
Setting the scene
Deal making has slowed following sky-high valuations in the wake of the COVID-19 pandemic. When the cost of capital increased, valuations declined, but sellers were still looking for the same multiples.
But that may be changing as sellers and buyers start seeing eye to eye on valuations, and investors are keen to deploy cash into new investments.
“There was a standoff where sellers wanted super high numbers, and buyers wanted the realistic price with the cost-of-capital price into it. And we’ve really gotten a standstill, especially for the large platforms through COVID,” Ryan Kaczka, managing director of Strategique Partners, told Behavioral Health Business. “Last year is when things started to change a little bit, and what we have primarily seen driving that, especially for the larger transactions, is the dry powder, especially on the institutional investor side, is the highest it’s ever been.”
Strategique Partners is an M&A advisory firm specializing in the behavioral health market. The firm advised on the Haven Health Management deal.
Kaczka noted that some firms are closing new funds but haven’t deployed the capital of their previous fund.
This could be a good year for dealmaking, especially for larger platforms. Kaczka noted that he is working with a few large national platforms set to hit the market later this year.
“Those platforms that were not on the market and were waiting for the pricing to come back to [post-pandemic levels], they’re saying, ‘Hey, you know, we’ve waited the last couple of years. The multiples aren’t going to be the top of the market, like they were during COVID. But now we’re starting to see pretty, fairly priced multiples, and the buyers are very serious now, because they have to deploy that capital. And we’re having a lot of competing bids and offers when running a process,’” Kaczka said.
Laura Lovett contributed to the reporting of this story.