BrightSpring Health Services, a leading provider of behavioral and physical health services, is reportedly preparing to file for an initial public offering (IPO) worth $1 billion. This marks a significant shift for the Louisville, Kentucky-based organization, which initially filed paperwork to go public roughly two years ago. However, after pulling back on those plans in November 2023, BrightSpring is now re-engaging with investment firms and is aiming to file for the IPO in the fourth quarter of 2025, according to a recent Bloomberg News report.
The company, which operates across all 50 states, provides care for complex populations that require specialized or chronic care. The behavioral health IPO will give BrightSpring an opportunity to expand its offerings, which include applied behavioral analysis (ABA), mental health services, and even a behavioral health pharmacy. It also plays a critical role in the community by offering support for individuals with intellectual and developmental disabilities, youth and family services, and both home health and hospice care. With such a diverse portfolio of services, BrightSpring touches nearly every aspect of behavioral and physical health, making it a major player in the industry.
This renewed IPO attempt comes after a series of significant corporate changes. In 2018, BrightSpring was acquired by the private equity firm KKR in a deal that saw the company merge with PharMercia Corporation. At the time, the combined entity boasted an impressive $4.5 billion in revenue. However, despite this sizable growth and a robust service offering, BrightSpring has faced challenges on its path to becoming a publicly traded company. After filing to go public in 2023, the company decided against moving forward with the IPO, only to revive the plan later on.
BrightSpring’s decision to push forward with the behavioral health IPO reflects the company’s confidence in its position within the behavioral health space. The company has reportedly enlisted Goldman Sachs Group and KKR’s capital markets division to assist with the process, signaling the seriousness of their commitment to a public offering in the near future. If successful, this IPO could provide a significant boost to the company’s growth and market presence, expanding its ability to serve the growing demand for behavioral and physical health services.
However, the market for behavioral health IPOs has been relatively quiet in recent years. Behavioral health IPOs have been scarce, especially as many private equity-backed companies have opted for mergers and acquisitions (M&A) as an exit strategy instead. In 2021, outpatient behavioral health provider LifeStance (Nasdaq: LFST) went public but has since faced significant challenges on the stock market. LifeStance’s stock, initially valued at about $24 per share, is now trading for under $7 per share, reflecting the difficulties that companies in the behavioral health space have faced on the public markets.
Despite the rocky road for some behavioral health IPOs, the M&A activity in the industry remains strong. According to M&A advisory firm The Braff Group, there were 75 behavioral health deals in the first half of 2023 alone, which, although down 33% year over year, still outpaces the number of IPOs in the sector. This trend highlights a key issue: while IPOs are a high-profile strategy for raising capital and expanding business, they have not been the preferred route for most behavioral health companies. Instead, private equity firms and other investors have continued to pursue acquisitions as a way to scale companies in the rapidly growing sector.
For BrightSpring, the decision to go public through a behavioral health IPO could offer a unique opportunity to raise the necessary funds to fuel further expansion, as well as raise its visibility within the behavioral health market. The company’s large service footprint, with offerings that range from mental health services to hospice care, positions it well in an industry that is seeing increasing demand for quality, specialized care. BrightSpring’s IPO could signal a shift in the industry, where more companies begin to follow in its footsteps, navigating the public markets as they look for ways to capitalize on the burgeoning need for behavioral health services.
As BrightSpring moves forward with its IPO plans, all eyes will be on how the company manages to differentiate itself in an increasingly competitive and challenging market. Behavioral health IPOs may be rare, but they represent an opportunity for organizations like BrightSpring to access new capital and further their growth. Whether BrightSpring’s IPO will be successful or face a similar fate as other recent IPOs in the space remains to be seen, but it will undoubtedly shape the future of behavioral health in the public sphere.
