The behavioral health industry continues to experience significant investment activity, even as overall deal volume slows compared to the record-setting pace of 2021. Within the broader landscape of addiction treatment M&A, a notable move comes from middle-market private equity firm Lee Equity Partners, which has acquired Bradford Health, a Birmingham, Alabama-based substance use disorder treatment provider with more than four decades of experience.
The terms of the transaction were not disclosed, but the deal is a strategic one. Bradford Health operates 40 substance abuse treatment and recovery centers across the Southeast United States, with facilities in Alabama, Tennessee, Mississippi, North Carolina, and Arkansas. Its services include inpatient and residential programs, outpatient rehab, detoxification, and extended care, positioning the company as one of the region’s leading providers of substance use disorder care.
Strategic Alignment Between Bradford Health and Lee Equity
For Bradford Health, the partnership marks the next step in its long history of growth and patient care. CEO Mike Rickman highlighted the benefits of the acquisition, saying:
“We are pleased to be partnering with Lee Equity given their long-term track record of building market-leading healthcare businesses and developing clinically excellent organizations, specifically in behavioral health.”
Lee Equity purchased the company from Centre Partners, which had owned Bradford Health since 2016. With its new backer, Bradford Health is expected to accelerate its expansion and further enhance the quality of its clinical programs. Mark Gormley, Partner at Lee Equity, noted:
“We believe that the Company is well positioned for the future and will accelerate its growth trajectory while continuing to deliver high quality patient care.”
Strengthening a Growing Behavioral Health Portfolio
The acquisition adds to Lee Equity’s expanding footprint in behavioral health. The firm already has investments in Summit Behavioral Health, which focuses on mental health and addiction services, and the Eating Recovery Center, a leader in treating eating disorders. The addition of Bradford Health extends Lee Equity’s portfolio into substance use disorder treatment across multiple states, reinforcing its position as an active participant in addiction treatment M&A.
Bradford Health’s regional presence and community-based approach fit well with broader market trends. Investors in addiction treatment M&A are shifting their focus away from luxury, cash-pay programs and toward more affordable, accessible care models that meet patients where they are. This positions Bradford Health as a strong asset in a changing marketplace.
Broader Trends in Addiction Treatment M&A
The acquisition comes at a time when deal activity in the sector has slowed overall. According to the Braff Group, addiction treatment M&A volume dropped 29.4% in the first half of 2022 compared to the prior year. Rising interest rates and economic uncertainty have led some investors to step back, while others are being more selective in their acquisition strategies.
Still, while fewer deals are being completed, the market is far from stagnant. Several notable addiction treatment M&A transactions have taken place this year, including:
- BayMark Health Services acquiring Fritz Clinic, an opioid use disorder treatment provider.
- Discovery Behavioral Health acquiring Brookdale Premiere Addiction Recovery, expanding its California presence.
- BrightView Health acquiring Column Health, which offers virtual and in-person medication-assisted treatment and psychotherapy.
These deals illustrate how providers with scalable, affordable, and evidence-based models remain attractive targets in addiction treatment M&A.
Why the Shift Toward Affordable Care Matters
One of the most important dynamics influencing addiction treatment M&A is the pivot away from luxury programs toward accessible, community-based care. As Dexter Braff, president of the Braff Group, explained during the Behavioral Health Business VALUE conference:
“All the money is not in a luxury program. All the money is in state-funded, and low and affordable private-pay in the local markets where people are getting the service.”
This shift highlights why Bradford Health, with its regional reach and decades of clinical experience, is a strong fit for Lee Equity’s investment strategy. By focusing on accessibility and affordability, providers can serve larger populations and align with payer priorities while remaining competitive in the addiction treatment M&A marketplace.
Outlook for Consolidation in Behavioral Health
Despite headwinds from interest rates and cautious valuations, many in the industry believe the current environment presents opportunities for well-capitalized firms. Companies with cash reserves, or “dry powder,” are in a strong position to acquire attractive targets while others sit on the sidelines.
David White, CEO of BayMark Health Services, described this trend at Behavioral Health Business’ INVEST event:
“We’re sitting there with some dry powder, and we can wait it out. That’s been really helpful from an acquisition perspective; we’re able to acquire now and we’re seeing some folks who were acquisitive, who aren’t now.”
Lee Equity’s acquisition of Bradford Health reflects this opportunistic yet strategic approach. It also reinforces the long-term attractiveness of behavioral health as a sector for private equity investment, particularly within the scope of addiction treatment M&A.
Looking Ahead
For Bradford Health, the partnership with Lee Equity provides the resources and backing needed to expand services, invest in clinical programs, and reach more communities across the Southeast. For the broader industry, it underscores a key lesson: addiction treatment M&A remains a vital tool for building scale, driving innovation, and ensuring that more patients have access to evidence-based care.
As the landscape evolves, deals like this are expected to shape the future of the sector. Organizations that combine affordability with clinical excellence are likely to be the most attractive targets for investors and the most sustainable providers for communities. With its acquisition of Bradford Health, Lee Equity is positioning itself at the forefront of that shift, reinforcing its commitment to behavioral health and to the future of addiction treatment in America.
