Behavioral Healthcare Services Market Update – October 2025

Integrated Offerings Drive Uptick in Behavioral Healthcare Services Market Deal Activity

A heightened focus on integrated and comprehensive care in the treatment of behavioral disorders has continued to drive mergers and acquisitions (M&A) activity within the Behavioral Healthcare Services market, with deal volumes seeing healthy year-over-year (YOY) gains. Investors continue to pursue attractive opportunities to expand the continuum of high-quality care and ease treatment access to address the ongoing and underserved behavioral health crisis nationally. Rising diagnosis rates of mental health illnesses across U.S. demographics, combined with the acute nationwide provider supply and demand imbalance and recent reimbursement incentives, will continue to promote strong Behavioral Healthcare Services market deal activity.

Behavioral Healthcare Services Market Rebounds Amid Care Continuum Convergence

The holistic treatment of behavioral disorders has continued to drive consolidation within the historically fragmented Behavioral Health Services market. Acquirers have sought out targets both within the Behavioral Healthcare sector as well as in accompanying care domains to establish themselves as turnkey service providers. Sector dealmaking has risen 47.1% YOY to 75 announced or closed transactions in YTD 2025 ending September 30^th. Consolidation has been widely adopted by industry players looking to expand their offerings and footprints in underserved geographic markets. Strategic acquirers have displayed the largest YOY gains in deal activity in YTD 2025, having posted increases of 105% compared to a modest 9.7% uptick across financial buyers. Private equity add-on transactions have ticked up 19%, shedding a yearslong gradual decline since 2021 and signifying renewed interest in expanding investments in the sector fueled by more favorable lending conditions and synergistic bolt-on and roll-up opportunities.

Highlighting these consolidation trends, Capstone Partners advised Nyman Associates—a leading regional provider of school and home-based behavioral health, mental health, and therapeutic services to children with special needs, Autism Spectrum Disorder (ASD), and developmental/ behavior issues—on its sale to Avesi Partners-backed Point Quest Group in June 2024. Terms of the deal are confidential. Nyman’s patient-centric comprehensive continuum of care, entrenched client relationships, and significant opportunities for growth in existing and adjacent geographies attracted Point Quest to the deal. Point Quest will use the acquisition to address the heightened and underserved need for mental and behavioral services among children and adolescents. Additional notable sector transactions follow. 

• Centerstone to Acquire Brightli (July 2025, Undisclosed) – Behavioral healthcare provider Centerstone announced its acquisition of Brightli in July 2025 (undisclosed). Brightli is a Missouri-based care provider specializing in the integration of behavioral health, addiction treatment, and developmental disability services. The need for a comprehensive approach to the dual treatment of both mental health and substance use disorders (M/SUD) drove the acquisition. “This partnership not only positions us to more effectively navigate the changing behavioral health landscape, but it also helps us achieve our goal of providing more services to more people in need,” stated Centerstone CEO, David Guth, according to a deal press release.¹ Inorganic growth has been a core strategy for both Centerstone and Brightli, with each company completing 20 or more acquisitions since their founding, influenced by a shared goal of expanding geographic reach and service capabilities. Upon completion of the acquisition, Centerstone anticipates combined annual revenues exceeding $1 billion via 360 care locations and 1,500 K-12 schools across nine U.S. states, according to the press release. 

• Clearview Capital Acquires Advantage Behavioral Health (April 2025, Undisclosed) – Clearview Capital acquired Advantage Behavioral Health in April 2025 for an undisclosed sum, marking the fourth platform investment in the firm’s $850 million Fund V, according to a press release.² Advantage specializes in mental health outpatient treatment programs, both in person and via telehealth services, and operates in nine U.S. states with more than half a million annual patient visits. The growing gap between individuals requiring behavioral healthcare services and lack of available resources—a dynamic that has been deepened by the COVID-19 pandemic—was cited as a strong factor that attracted Clearview to the deal. “The mental health crisis has only deepened since the COVID-19 pandemic, and the Advantage team is committed to being part of the solution by helping to narrow the supply/demand gap in mental health care,” stated Clearview Principal Jamie Engelhardt. Clearview is an experienced investor in the Behavioral Healthcare space, having exited from multiple treatment providers including Advanced Medical Personnel Services (AMPS), Apothecare, Community Medical Services, Pediatric Health Choice, and Pyramid Healthcare. Clearview is actively pursuing add-on acquisition targets for the Advantage platform with at least $1 million of EBITDA, with particular emphasis on expanding Advantage’s presence across the continuum of care, according to the company website.³ 

• Webster Equity Partners-Backed US Pediatric Partners Acquires Hope Services (April 2025, Undisclosed)– Webster Equity Partners-backed US Pediatric Partners (USPP) acquired mental healthcare provider Hope Services in April 2025 for an undisclosed sum. USPP pursued the transaction to enhance its ability to offer a wider range of services to patients across the spectrum of care. “We believe that addressing both the physical and mental wellbeing of our patients is essential to improving their outcomes and quality of life,” said USPP CEO, Dan Murphy, according to a deal press release.⁴ The acquisition of Hope Services increases USPP’s presence to 55 locations across New Jersey, Maryland, North Carolina, and South Carolina while also adding a range of services including traditional and intensive outpatient mental health programs, intensive in-home care, medication management, and partial hospitalization. The transaction builds upon Webster Equity Partners’ acquisition of BTST Services (July 2023, undisclosed), a community-based behavioral healthcare provider. Webster, which specializes in patient-centric healthcare investments, has been utilizing the USPP platform to build out an integrated Community Behavioral Health Services (CBHS) model.

Public Companies Broaden Service Offerings to Align with Clinical Best Practices

Public companies have been actively shifting away from traditional siloed behavioral healthcare approaches, instead positioning themselves as full spectrum providers in order to capitalize on opportunities across care disciplines.

Acadia Healthcare (Nasdaq:ACHC) noted that the treatment of co-occurring disorders has guided its partnership strategy, redefining the company’s approach to modern healthcare. “We will continue to prioritize partnerships with payers and state agencies that recognize the long-term cost savings of integrating mental and physical healthcare,” said CEO Christopher Hunter, according to the company’s Q2 2025 Earnings Call.⁵ Acadia identified its ongoing expansion across healthcare domains as a key competitive strength driving its growth, executing multiple acquisitions within recent years to increase its co-occurrence-relative bed count. Specialty treatment facilities providing care for both substance use disorder (SUD) and mental disorders have grown to account for nearly one-fifth of the company’s revenue streams over the past few years, generating 18.8% of total 2024 revenue, according to Acadia’s 2024 10-K.⁶

Universal Health Services (NYSE:UHS) CFO Steve Filton echoed a similar sentiment to his peers, identifying the importance of offering a broad spectrum of services when approaching opioid use disorder (OUD) treatment. “Our real ability to provide competitive or clinical advantage is being able to provide patients with sort of a whole continuum of care,” stated Filton, according to UHS’s Q4 2024 Earnings Call.⁷

Talkspace (Nasdaq:TALK) has steadily broadened its offerings, evolving from a talk therapy telehealth platform into a comprehensive mental healthcare provider that now includes both therapy and psychiatry services. The company’s partnership with Amazon (Nasdaq:AMZN) Pharmacy, announced in May 2025, has further strengthened its ability to deliver integrated behavioral health support—combining clinical care with medication management to better serve patient needs. “Psychiatric medication is most effective when paired with therapy, and this integration with Amazon Pharmacy allows us to deliver truly comprehensive care—from diagnosis to ongoing treatment—all in one streamlined experience,” stated Talkspace CEO Dr. Jon Cohen in a company press release.⁸

KindlyMD (Nasdaq:NAKA) recently acknowledged that the healthcare crisis has spurred a modification in the company’s approach to patient care, combining behavioral health services with pain management and alternative medicine to address the high rates of physical pain associated with mental health disorders. “Our innovative approach to integrated physical and mental health services creates a powerful convergence…positioning us to deliver exceptional patient outcomes and broaden access to care,” said KindlyMD CEO Tim Pickett, according to a company press release.⁹

These public market developments have served to guide the acquisition strategies of competitors, spurring positive deal activity within the Behavioral Healthcare Services market.

Demographic Trends Solidify Demand for Behavioral Healthcare Services, Government Guidance Incentivizes Supply

The unified treatment of co-occuring mental health disorders and the holistic treatment of physical, mental, and behavioral healthcare needs has remained the focus of investors, prompting an increase in M&A transactions. Behavioral healthcare cases have undergone a yearslong rise in frequency within the U.S., most recently exacerbated by the COVID-19 pandemic. This growing mental health crisis has served as a strong tailwind for M&A activity within the Behavioral Healthcare Services market, driving continuing consolidation within the sector as providers seek to expand their offerings and capacity to better address the growing need for behavioral and mental health services nationally.

The percentage of patients in the U.S. with mental health diagnoses rose 39.8% between 2019 and 2023, driven by factors including increased rates of isolation, economic uncertainty, and the unprecedented effects of social media, to name a few. This surge has been seen across demographics, with younger adults (aged 18- to 25-years old) displaying the largest prevalence of any mental illness (AMI) diagnosis (33.7%), according to research conducted by FAIR Health.¹⁰ Behavioral conditions like depression, anxiety, and SUD continue to grow at alarming rates nationally. Incidents of major depressive disorder within the U.S. population have increased 41.9% from 2019 – 2023, while generalized anxiety disorder and attention-deficit/hyperactivity disorder have risen 59.6% and 70.4%, respectively. Notably, these estimates are likely understating the true rates of these disorders, as many individuals experiencing symptoms forego diagnosis and treatment.

While behavioral healthcare utilization nationally has increased by 44% since 2018 and total behavioral health visits have eclipsed the total number of primary care visits for the first time in 2024, there continues to remain a significant disparity between the number of individuals that are in need of care compared to the actual number that receive treatment.¹¹ According to the Substance Abuse and Mental Health Services Administration’s (SAMHSA) 2024 National Survey on Drug Use and Health, among the 21.2 million U.S. adults diagnosed with both AMI and SUD in 2024, 41.2% (approximately 8.7 million individuals) went completely untreated.¹² In addition, only 1.3 million individuals received adequate care for both conditions. Lack of access to quality care and the high cost of treatment are leading factors for this material supply and demand imbalance. More than 150 million people—roughly 44% of the U.S. population—reside in federally designated mental health professional shortage areas (HPSAs), according to Health Resources and Services Administration (HRSA) data.¹³ Rural areas are most vulnerable, displaying the highest rates of demand imbalance. Seventy-five percent of rural counties have fewer than 50 mental health providers per 100,000 citizens, according to an ABC News analysis of CMS data.¹⁴ Midwestern states including Nebraska, North Dakota, and South Dakota have the most constrained behavioral healthcare personnel, a matter that is exacerbated by the region leading the U.S. in both acute increase in mental health diagnoses and largest percentage of overall diagnosed population, according to FAIR Health’s study.

To address this health crisis nationally, government agencies have begun to initiate the shift in how U.S. care providers approach behavioral healthcare by increasing incentive offerings and releasing best practice guidelines. Annual funding for mental illness research by the National Institutes of Health (NIH) has nearly doubled over the past eight years, highlighting the growing need for continued investment in behavioral healthcare services, according to the National Institute for Mental Health (NIMH).¹⁵

CMS has encouraged the integration of healthcare domains through administrative reform. Proposed changes to the Physician Fee Schedule (PFS), outlined within the CMS’ 2025 Medicare Physician Fee Schedule Final Rule, are designed to promote the integration of behavioral healthcare with primary care. The proposed change to the PFS would increase payment rates for providers offering integrated services across the care continuum, aligning clinician best practices with financial incentives. The agency initiated a trial run, dubbed the Innovation in Behavioral Health (IBH) model, in January 2025 in four U.S. states. The IBH model promotes the integration of behavioral health, physical health, SUD, and health-related social needs (HRSNs) via the value-based Integration Support Payment (ISP) system. Statistical evidence of behavioral health comorbidity, including that 40% of adult Medicaid enrollees experience co-occurrence of mental health disorders and SUD, has been used to guide the transition in how these insurance programs are administered, according to CMS.¹⁶

The U.S. Department of Veterans Affairs has expressed the goal of strengthening efforts to increase access to both mental health and SUD treatment. “Greater coordination among the different programs that provide services addressing veterans’ mental health, substance use, and physical health can increase access to care,” stated the agency in its National Strategy for Preventing Veteran Suicide.¹⁷ The department’s 2026 fiscal year budget request allocates $1.5 billion to further establish intensive inpatient services within the Mental Health Residential Rehabilitation Treatment Programs (MH RRTP), a nationwide system of 120 residential rehabilitation locations that integrate critical mental health services with SUD treatment, according to a press release.¹⁸

The continued development of government initiatives has proven critical to the widespread adoption of integrated healthcare approaches. The influence of newly established best practices and financial incentives, combined with the national behavioral and mental healthcare crisis and significant rates of individuals that go untreated each year, is likely to drive further consolidation and sector investments. Amid this increase in care demand, industry players and investors are likely to seek attractive opportunities focused on companies that prioritize comprehensive and coordinated patient care, demonstrate patient efficacy and favorable outcomes, and provide cost-effective care.

To discuss the market implications of the integration of behavioral healthcare services, provide an update on your business, or learn about Capstone’s wide range of advisory services and Behavioral Healthcare Services market knowledge, please contact us.

Brendan Bradley, Associate, was the lead Market Intelligence contributor to this article. 

Endnotes

1. Centerstone, “Brightli and Centerstone announce plans to merge and create nation’s largest nonprofit provider of behavioral health services,” https://centerstone.org/news-events/news/brightli-and-centerstone-announce-plans-to-merge/, accessed August 28, 2025.

2. Clearview Capital, “Clearview Partners with Advantage Behavioral Health to Increase Access to Mental Health Care,” https://www.clearviewcap.com/investment/advantage-behavioral-health/, accessed August 22, 2025.

3. Clearview Capital, “Clearview Capital Seeks Add-on Acquisitions for Advantage Behavioral Health,” https://www.clearviewcap.com/add-on-criteria/, accessed August 25, 2025.

4. U.S. Pediatric Partners, “U.S. Pediatric Partners Expands Behavioral Health Footprint with Acquisition of Hope Services in North Carolina,” https://uspediatricpartners.com/blog/us-pediatric-partners-acquires-hope-services-north-carolina, accessed August 26, 2025.

5. Acadia Healthcare, “Q2 2025 Earnings Call,” https://www.acadiahealthcare.com/investors/event-calendar/, accessed August 22, 2025.

6. Acadia Healthcare, “2024 Annual Report,” https://acadiahealthcare.gcs-web.com/static-files/d3aded9e-429a-4617-93d7-e237c58b8d1f, accessed August 22, 2025.

7. Universal Health Services, “Q4 2024 Universal Health Services Earnings Conference Call,” https://ir.uhs.com/events/event-details/q4-2024-universal-health-services-earnings-conference-call, accessed August 22, 2025.

8. Talkspace, “Talkspace Becomes First Behavioral Health Provider to Integrate with Amazon Pharmacy, Offering Psychiatry Services and a More Seamless Medication Management Experience,” https://investors.talkspace.com/news-releases/news-release-details/talkspace-becomes-first-behavioral-health-provider-integrate, accessed August 22, 2025.

9. KindlyMD, “KindlyMD Opens New Integrated Behavioral Health Clinic on the Ogden Regional Medical Center Campus,” https://www.nasdaq.com/press-release/kindlymdr-opens-new-integrated-behavioral-health-clinic-ogden-regional-medical-center, accessed August 22, 2025.

10. FAIR Health, “Trends in Mental Health Conditions,” https://www.fairhealth.org/article/share-of-patients-with-mental-health-diagnoses-rose-40-percent-nationally-from-2019-to-2023-according-to-new-fair-health-study, accessed September 17, 2025.

11. Trilliant Health, “2025 Trends Shaping the Health Economy,” https://www.trillianthealth.com/market-research/reports/2025-health-economy-trends, accessed October 16, 2025.

12. Substance Abuse and Mental Health Services Administration, “Key Substance Use and Mental Health Indicators in the United States: Results from the 2024 National Survey on Drug Use and Health,” https://www.samhsa.gov/data/data-we-collect/nsduh-national-survey-drug-use-and-health/national-releases/2024, accessed August 22, 2025.

13. Health Resources and Services Administration, “HRSA Data Warehouse,” https://data.hrsa.gov/topics/health-workforce/shortage-areas/hpsa-find, accessed October 16, 2025.

14. ABC News, “America’s mental health care deserts: Where is it hard to access care?” https://abcnews.go.com/Health/americas-mental-health-care-deserts-hard-access-care/story?id=84301748, accessed October 10, 2025.

15. National Institute of Mental Health (NIMH), “NIMH FY 2025 Budget Fact Sheet,” https://www.nimh.nih.gov/about/budget/nimh-fy-2025-budget-fact-sheet, accessed September 17, 2025.

16. Centers for Medicare & Medicaid Services, “Innovation in Behavioral Health (IBH) Model,” https://www.cms.gov/priorities/innovation/innovation-models/innovation-behavioral-health-ibh-model, accessed August 26, 2025.

17. Department of Veterans Affairs, “National Strategy for Preventing Veteran Suicide 2018-2028,” https://www.va.gov/prevents/, accessed August 22, 2025.

18. Department of Veterans Affairs, “Department of Veterans Affairs FY 2026 President’s Budget Mental Health Residential Rehabilitation Treatment Programs (MH RRTP),” https://department.va.gov/administrations-and-offices/management/budget/, accessed August 22, 2025.