The behavioral health sector has undergone dramatic transformation over the past decade, shaped by evolving patient needs, telehealth advancements, and ongoing provider shortages. Against this backdrop, behavioral health mergers and acquisitions have become crucial for growth and scalability. One illustrative case is the acquisition of Psych360 by MindCare—a transaction that not only reflects industry trends but also provides valuable lessons for behavioral health leaders considering mergers or acquisitions.
Founding Psych360: From Hospital Floors to Long-Term Care
Nicole Coniglio, a nurse practitioner by trade, co-founded Psych360 in 2015 with her husband, Rocco Coniglio. Nicole’s clinical journey spans hospital settings, nursing homes, assisted living facilities, and intermediate care communities. This diverse experience gave her a firsthand understanding of the challenges patients face and the gaps in behavioral health services across the care continuum.
When Psych360 was founded, Nicole and Rocco started small. “We were literally knocking on nursing home doors,” Nicole recalls. She served as the clinician, personally managing accounts, while Rocco handled the business side. Their goal was clear: provide high-quality psychiatric care to long-term care communities that often struggled to access consistent behavioral health services.
Early growth was organic. Between 2015 and 2018, Psych360 steadily expanded, but it was the introduction of growth equity from Physician Growth Partners that accelerated the company’s trajectory. The minority investment allowed Psych360 to hire staff more aggressively, build infrastructure, and expand services. By 2018, the company had laid the groundwork for broader regional expansion.
Scaling Through Telehealth and Psychology Services
The COVID-19 pandemic brought unprecedented challenges, but it also presented opportunities. Psych360 pivoted quickly, implementing telehealth solutions that allowed the company to maintain continuity of care while reaching patients beyond traditional geographic boundaries. Alongside telepsychiatry, the organization added psychology services, creating a more holistic approach for long-term care populations.
“Telehealth was really the silver lining of COVID,” Nicole notes. “It pushed out the ability to reach more patients than ever before. Now that the door is open, it’s going to be very hard to close it.” For Psych360, telehealth not only facilitated growth but also highlighted the importance of modern care delivery models in addressing provider shortages and expanding access.
By the time the company became part of MindCare, Psych360 had established itself as a leading provider of psychiatric services in long-term care, leveraging both in-person and virtual models.
MindCare: Building a Telebehavioral Platform
MindCare, headquartered in Chicago, operates primarily in the acute care setting, delivering telebehavioral services to hospitals. Backed by private equity sponsor WP Global, MindCare had been actively evaluating growth strategies to expand its platform and diversify its reach. According to Stuart Irby, an investment banker with Stephens Middle Market Investment Bank who represented MindCare, the organization’s focus was clear: “They were looking for ways to bridge gaps across the continuum of care while maintaining a high level of clinical excellence.”
The alignment between MindCare and Psych360 was evident early on. MindCare’s acute care focus complemented Psych360’s long-term care expertise, while Psych360’s nurse practitioner-led model addressed a significant pain point in the behavioral health workforce: a shortage of psychiatrists. With approximately 30,000 psychiatrists in the U.S.—60% of whom are over 55—the demand for scalable care models is urgent. Psych360’s NP model offered a solution, allowing MindCare to expand services without overreliance on a limited psychiatric workforce.
The Path to Acquisition: Building Relationships Before the Deal
While the acquisition closed in August 2023, the relationship between MindCare and Psych360 began well before that. Rocco explains that initial discussions in 2021 were exploratory, part of a broader market scan that helped both organizations learn what to look for in a potential deal. Although no transaction occurred then, the connection established between the CEOs laid the groundwork for a smoother process in 2022.
The deal itself was “unorthodox” in that it was highly relationship-driven rather than purely competitive. A WebEx meeting in December 2021 allowed the teams to align on operational philosophies and organizational culture. By the time the transaction formally began, trust and transparency were already established—two factors that proved critical to its efficiency.
Keys to a Successful Behavioral Health Merger
Behavioral health mergers are inherently complex, but several factors contributed to the success of the MindCare-Psych360 deal:
- Complementary Operations: Psych360 focuses on long-term care while MindCare specializes in acute care. This delineation ensured minimal operational overlap and maximized synergy.
- Cultural Alignment: Both teams shared a vision for patient care and growth, which reduced friction and enhanced collaboration.
- Experienced Advisors: Stuart Irby highlights the importance of professional guidance, including investment bankers and legal counsel, to navigate due diligence and negotiation efficiently.
- Transparent Communication: Strong communication at the CEO level allowed both sides to set expectations, share information promptly, and resolve potential issues before they escalated.
Rocco emphasizes that understanding what a “bad deal” looks like was equally important. Prior exploratory processes taught them to identify potential pitfalls, such as post-transaction operational conflicts or mismatched leadership styles. The result was a transaction that felt “right” on multiple levels—strategically, operationally, and culturally.
Navigating Due Diligence
The due diligence process for a behavioral health merger is multifaceted. Nicole notes that having an investment banker on their side was critical in managing the massive volume of data and maintaining focus on running the business. Rocco adds that even with efficient advisors, founders must actively participate, understanding the details of financials, operations, and legal documents.
“We had to envision what success would look like post-merger,” Rocco says. “It’s about more than numbers—it’s about whether the teams can work together and deliver on patient care.” For Psych360, thorough diligence ensured that the organization could transition smoothly while continuing to grow and innovate.
Challenges Unique to Behavioral Health
Behavioral health presents unique challenges in mergers and acquisitions, though many are similar to other healthcare sectors. These include:
- Provider Shortages: Recruiting and retaining psychiatrists and other mental health professionals is difficult, making scalable care models like NP-led services essential.
- Continuum of Care Complexity: Integrating services across acute and long-term care settings requires careful coordination and strategic alignment.
- Regulatory Variability: Each state has its own scope-of-practice laws, which can complicate deployment of NPs and telehealth services.
By addressing these challenges proactively, the teams at MindCare and Psych360 positioned the merger for long-term success.
Macro Trends Driving Behavioral Health Mergers
The acquisition also reflects broader trends in behavioral health. Stuart Irby notes that the sector is experiencing rapid change, driven by:
- High Demand vs. Limited Supply: Patients need services, but providers are scarce, prompting organizations to pursue behavioral health mergers to achieve scale.
- Telehealth Expansion: COVID-19 accelerated virtual care adoption, and telebehavioral services have proven critical for reaching patients efficiently.
- Financial Pressures: Reimbursement complexities and delayed payer payments create cash flow challenges, which consolidation can help mitigate.
These macro forces make behavioral health mergers a strategic tool for growth, allowing organizations to expand access, build operational scale, and navigate a complex regulatory landscape.
Post-Merger Integration and Priorities
Since the merger closed on August 16, 2023, Nicole and Rocco have relocated from Ohio to Nashville to work closely with MindCare’s C-suite. Nicole serves as Chief Clinical Officer, focusing on integrating the NP model into hospital systems and optimizing care delivery. Rocco, as Chief Revenue Officer, is focused on strategic growth, partnership development, and operational alignment.
Integration priorities include:
- Maximizing Synergies: Identifying ways each vertical can support and improve the other.
- Expanding NP Utilization: Educating hospital systems on leveraging nurse practitioners to deliver care more efficiently.
- Operational Efficiency: Ensuring analytics, technology platforms, and workflows are optimized for scalability.
Lessons Learned from a Behavioral Health Merger
For organizations considering mergers or acquisitions, the Psych360-MindCare experience offers several key lessons:
- Vet Partners Carefully: Due diligence is critical not only financially, but culturally and operationally.
- Set Realistic Expectations: Understand timelines, regulatory hurdles, and potential operational challenges.
- Invest in Expertise: Experienced investment bankers, legal counsel, and advisors are invaluable in navigating complex deals.
- Professionalize Operations: Strong analytics, platforms, and business processes are essential for valuation and post-merger efficiency.
- Maintain Perspective: Founders should compartmentalize emotions, balancing personal attachment with strategic objectives.
Nicole adds, “Reach out to those who have gone through this before. The more information you gather, the better prepared you’ll be, both professionally and personally.”
Stuart Irby emphasizes that communication, organization, and transparency are crucial. Treat the M&A process like a relationship: openness, accountability, and trust lead to a successful transaction.
The Future of Behavioral Health and Telehealth
Looking ahead, telehealth will continue to shape behavioral health. Nicole emphasizes that the expansion of virtual care is a permanent shift, improving access for patients across state lines and different care settings. Strategic behavioral health mergers like Psych360 and MindCare enable organizations to leverage technology, workforce models, and clinical expertise to meet the growing demand for behavioral health services.
Stuart adds that consolidation, while sometimes seen as controversial, is necessary for building providers of scale capable of addressing national mental health needs. Scale allows organizations to manage cash flow, negotiate with payers, and deliver consistent, high-quality care.
Conclusion
The acquisition of Psych360 by MindCare demonstrates how strategic alignment, strong leadership relationships, and careful planning can lead to a successful behavioral health merger. By integrating complementary care models, leveraging telehealth, and addressing workforce shortages, the combined organization is positioned for growth and innovation.
For other behavioral health leaders, the key takeaway is clear: successful mergers require vision, diligence, collaboration, and operational readiness. When executed well, they not only benefit the organizations involved but ultimately improve access and quality of care for the patients who need it most.
