New York City-based private equity firm NexPhase Capital LP is reportedly considering selling its stake in Action Behavior Centers, a leading provider of autism services and Applied Behavioral Analysis (ABA) therapies. According to Axios Pro, NexPhase first invested in the Austin, Texas-based company in October 2018 and is now exploring a potential exit. This move comes as the behavioral health and autism services markets continue to attract significant investor attention due to rising demand and favorable policy changes driving Autism Services Market Growth.
Action Behavior Centers currently operates approximately 140 locations across five states: Colorado, Texas, Illinois, North Carolina, and Arizona. The company’s trailing adjusted EBITDA stands at about $40 million, with projections to increase to $60 million by the end of 2022. This growth highlights the company’s expanding operational scale and financial performance, solidifying its position as one of the largest autism services operators in the United States. For comparison, the Center for Autism and Related Disorders (CARD) claims the title of the world’s largest autism treatment provider, with 219 centers nationwide.
The Strategic Landscape: Behavioral Health Sector and Deal Multiples
The potential sale of Action Behavior Centers is poised to attract strong acquisition interest and command a premium valuation. Deal multiples in the behavioral health sector have surged over recent years, fueled largely by the COVID-19 pandemic, which has sharply exposed the gap between the overwhelming demand for behavioral health services and the limited supply available. This supply-demand imbalance has created a lucrative environment for investors, with valuations for behavioral health providers trending higher and reflecting ongoing Autism Services Market Growth.
Dexter Braff, president of The Braff Group—a mergers and acquisitions firm specializing in behavioral health—commented earlier this year that he expects deal multiples to remain robust well into 2022, reflecting sustained investor enthusiasm for companies in this space. Although some areas of behavioral health investment have cooled in 2022, private equity activity in autism services has remained particularly strong, driven by ongoing Autism Services Market Growth.
Private Equity Interest and Market Growth in Autism Services
The heightened interest in autism services among private equity firms reflects broader market trends that have been building for several years. According to proprietary data tracked by The Braff Group, deal volume in autism and intellectual and developmental disabilities (IDD) services has increased dramatically over the last decade. In 2012, only two deals were recorded in these segments. This number grew steadily, reaching 37 deals in 2018 and peaking at 46 deals in 2019. The years 2020 and 2021 each saw 39 deals, demonstrating sustained investment momentum despite the pandemic and economic uncertainties.
These trends underscore the significant Autism Services Market Growth, fueled by increasing demand and investor confidence.
Key Drivers Behind the Growth in Autism Services Investment
Two major factors have catalyzed the rapid expansion of the autism services market and the surge in private equity investment:
- Insurance Mandates for ABA Coverage: Over the past decade, policy advocates have successfully lobbied state legislatures to mandate insurance coverage for ABA services, which are considered the gold standard in autism treatment. These mandates have dramatically improved access to ABA therapy by requiring many private insurers and Medicaid plans to cover these services. The inclusion of ABA under insurance plans has created a reliable, recurring revenue stream for providers and has lowered financial barriers for families seeking treatment, making autism services a more scalable and investible sector—an important element driving Autism Services Market Growth.
- Increasing Autism Prevalence: The growing rate of autism diagnoses in children has expanded the potential patient population and market size for autism service providers. In 2005, the Centers for Disease Control and Prevention (CDC) estimated autism prevalence at about 1 in 166 children. This rate rose to approximately 1 in 44 by 2018. More recent research, including an analysis of the National Health Interview Survey data published in 2020 by Chinese researchers, suggests autism rates may now be as high as 1 in 29 children in the U.S. This trend not only signals greater demand for diagnostic and therapeutic services but also suggests that the autism services market will continue to grow for years to come, further accelerating Autism Services Market Growth.
The Broader Behavioral Health Context
The rise in demand for autism services is part of a larger behavioral health care landscape where shortages of providers and facilities have become acute. The pandemic spotlighted the mental health and behavioral needs of populations, accelerating investments in digital health, outpatient care, and specialty services like ABA therapy. Investors have recognized the potential for sustainable growth within behavioral health, particularly in sub-sectors with strong reimbursement support and growing patient bases. These factors collectively fuel ongoing Autism Services Market Growth.
What This Means for NexPhase and the Market
For NexPhase Capital, the decision to potentially sell its stake in Action Behavior Centers aligns with broader market dynamics. Given the company’s strong EBITDA growth—expected to rise from $40 million to $60 million in 2022—and its expanding footprint, the firm is well positioned to command a premium valuation in the current market environment. Strategic buyers or other private equity firms interested in autism services are likely to see value in the company’s scale, geographic diversification, and established revenue streams. This opportunity exemplifies the continued robust Autism Services Market Growth.
More broadly, the sustained private equity interest in autism services reflects confidence in the sector’s growth prospects. With ongoing legislative support for insurance coverage, continued increases in autism diagnosis rates, and growing awareness among families and healthcare providers, the market for autism services is expected to remain a hotbed for investment and consolidation.
Conclusion
NexPhase Capital’s consideration of selling Action Behavior Centers comes at a pivotal time for the autism services sector. The combination of favorable insurance mandates, rising autism prevalence, and strong investor interest has driven substantial growth and elevated valuations for providers like Action Behavior Centers. As the demand for quality autism care expands, and behavioral health services become increasingly prioritized, companies in this space are likely to continue attracting significant investment. NexPhase’s potential sale of Action Behavior Centers could thus be a landmark transaction in the autism services market, reflecting broader trends shaping behavioral health care today and underscoring sustained Autism Services Market Growth.
