The substance use disorder (SUD) treatment landscape is undergoing a major transformation. Growing demand for services, combined with a fragmented provider network, has made the sector particularly ripe for Substance Use Disorder M&A. Investors and operators are actively seeking ways to consolidate providers, expand geographic reach, and improve operational efficiency while maintaining high-quality care.
Buyers and Sellers Priorities in SUD M&A
Panelists at Behavioral Health Business’ INVEST conference emphasized that buyers prioritize reputation, clinical quality, and the ability to scale services. Sellers, meanwhile, are increasingly focused on ensuring that any transaction preserves their organizational values and mission. This alignment—or lack thereof—can often determine the success of any Substance Use Disorder M&A deal.
BrightView Health and Serial Acquirers
Chad Smith, CEO of Cincinnati-based BrightView Health, described the trend of large-scale providers as “serial acquirers” executing roll-up strategies. BrightView, founded in 2015, primarily focuses on outpatient addiction treatment and serves over 20,000 patients across 97 sites in multiple states. Smith noted that reputation plays a critical role in acquisition success: “About half of our patients come from a referral partner in the community. If we make an acquisition that clients weren’t very fond of from the beginning, we have a tough, uphill battle.”
BrightView has been highly active in Substance Use Disorder M&A, completing nine acquisitions in recent years. In August, it acquired Column Health, a provider of virtual and in-person medication-assisted treatment (MAT) and psychotherapy services. This deal added 12 new locations in Massachusetts and Connecticut. Earlier acquisitions, including Right Path and Aspire in 2021, further expanded BrightView’s reach and diversified its service offerings.
Private Equity and Large Operator Activity
Private equity investors and larger operators are also shaping the SUD consolidation landscape. Lee Equity’s recent acquisition of Bradford Health, which includes 40 facilities, exemplifies the ongoing interest in large-scale Substance Use Disorder M&A. According to The Braff Group, behavioral health deals accounted for 41% of all healthcare M&A activity in the first half of 2022, reflecting the increasing role of consolidation in the sector.
While SUD deals are the second most common type of behavioral health transaction, just behind mental health acquisitions, the total number of deals has declined from 85 in 2021 to 60 in the first half of 2022—a 29.4% decrease. Nevertheless, demand remains strong. The CDC reports that over 40 million Americans age 12 and older have an SUD, making providers with strong reputations attractive targets for Substance Use Disorder M&A.
The Importance of Reputation for Smaller Providers
Smaller providers with a proven track record are particularly appealing to buyers. Reputation, quality outcomes, and community engagement are often more important than scale. “What we’re really focused on is market reputation,” Smith said. “People are going to come spend time in our facilities, get to know our people. If we make an acquisition that clients weren’t very fond of from the beginning, we have a tough, uphill battle.”
Innovation and Emerging Treatment Models
Beyond reputation, investors seek scalability and innovative service lines. Psychedelic-assisted treatments are emerging as a promising frontier, with early research suggesting benefits for both SUD and mental health treatment. Rose Bromka, COO at Portland-based virtual SUD provider Boulder Care, noted increasing interest in psychedelic therapies as part of broader Substance Use Disorder M&A considerations. Boulder Care has raised over $50 million in funding, including a $36 million Series B, and provides virtual care for opioid and alcohol use disorders, including MAT.
Seller Perspective and Alignment on Mission
From the seller’s perspective, alignment on mission and values is crucial. Dexter Braff, president of The Braff Group, highlighted that valuation gaps often arise when expectations for future growth exceed reality: “Usually the expectations for future growth are greater than reality… the sky is the limit when projecting what may happen in the future.”
For Boulder Care, maintaining organizational values and innovative models is non-negotiable. “It’s really important to us… that we’re partnering with payers in a value-based arrangement from the outset,” Bromka said, referencing their pioneering approach to virtual SUD treatment. Any acquisition would need to preserve these value-based care contracts, ensuring patient outcomes remain the priority.
Looking Ahead for SUD M&A
As the SUD market continues to evolve, Substance Use Disorder M&A activity will likely focus on providers with strong reputations, innovative care models, and scalable operations. Both buyers and sellers must carefully consider alignment on mission, quality, and growth potential. Providers who successfully balance patient-centered care with strategic expansion will be among the most attractive targets in a competitive M&A environment.
Ultimately, the convergence of demand, fragmentation, and innovation is driving a new era of Substance Use Disorder M&A. For investors and operators, the opportunity to create larger, more effective networks of care has never been clearer, and the stakes for maintaining reputation and quality have never been higher.
