Goldman Sachs Alternatives, the global alternative investment arm of Goldman Sachs Asset Management, has made a significant move in the autism therapy market with the acquisition of the Center for Social Dynamics (CSD), a leading autism therapy provider. This deal marks a pivotal moment in the growing sector of autism services, which has seen rapid growth and consolidation in recent years. As part of the deal, NMS Capital, the private equity firm that previously backed CSD, has reinvested in the company. While the terms of the deal remain undisclosed, the partnership has the potential to shape the future of autism therapy services across the United States.
The Center for Social Dynamics: A Leader in Autism Therapy Services
Based in Concord, California, the Center for Social Dynamics has established itself as a prominent provider of autism therapy services across multiple states. The company operates in California, Washington, Oregon, Hawaii, and Colorado, with a workforce of 1,500 providers delivering care to approximately 4,700 clients. CSD offers a range of services in virtual, school-based, home-based, and center-based settings, making it an omnichannel provider in the autism therapy space.
The company’s ability to deliver flexible, high-quality services tailored to the individual needs of children with autism has been one of its standout qualities, and this model aligns closely with the goals of Goldman Sachs Alternatives.
Jason Slocum, the managing director of inclusive growth at Goldman Sachs Alternatives, emphasized the importance of CSD’s omnichannel approach in a recent statement. According to Slocum, one of the key factors that drew Goldman Sachs to the company was its ability to provide services to children and families in the most convenient and appropriate setting. This model allows children to receive the necessary hours of therapy that align with their individualized clinical plans, ensuring that they meet the highest standards of care.
A History of Growth and Investment
The acquisition of CSD is part of an ongoing trend of consolidation within the autism therapy space. Since its recapitalization in 2019 by NMS Capital, the Center for Social Dynamics has seen substantial growth. NMS Capital’s investment has helped to fuel several rounds of mergers and acquisitions (M&A) as the company expands its footprint.
Most recently, CSD acquired South Sound Behavior Therapy (SSBT) in December 2021, marking its fifth acquisition since July 2020. These strategic acquisitions have been central to CSD’s growth strategy, positioning the company as a key player in the autism therapy industry.
Kelly Bozarth, CEO of CSD, expressed optimism about the partnership with Goldman Sachs, highlighting the firm’s resources and expertise in driving company growth. Bozarth stated, “We believe the resources and expertise at Goldman Sachs will enhance our capabilities as a company and accelerate our ability to grant access to care while continuing to improve client outcomes and family well-being.” This sentiment reflects the broader ambition of the company to not only grow but also maintain a focus on improving the quality of care it provides to families.
Goldman Sachs Alternatives: Focused on Inclusive Growth
Goldman Sachs Alternatives, which invests across a wide spectrum of asset classes, has been increasingly active in the healthcare sector. The firm is particularly focused on inclusive growth, which aims to expand access to services while maintaining a high standard of quality.
Slocum emphasized that Goldman Sachs Alternatives is not simply looking to drive financial returns but is also committed to making a positive impact on the autism therapy space. This strategy is reflected in the firm’s investment approach, which prioritizes clinical quality and outcomes alongside growth.
In contrast to traditional private equity investments, which often emphasize financial returns above all else, Goldman Sachs’ inclusive growth platform seeks to balance business expansion with an unwavering commitment to clinical excellence. This approach has led Goldman Sachs to view CSD as an ideal partner in their efforts to improve autism therapy services across the United States.
The State of the Autism Therapy Market and M&A Activity
The autism therapy market has seen significant investment in recent years, particularly in the field of applied behavior analysis (ABA), a widely used therapy for children with autism. However, after a surge in investment activity in 2020 and 2021, the pace of mergers and acquisitions (M&A) has slowed. This slowdown coincides with a wider downturn in private equity investing, which had previously been the driving force behind many deals in the autism therapy space.
Dexter Braff, founder and president of The Braff Group, noted that private equity has driven over 90% of all deals in the autism therapy sector. However, with the market slowing, it appears that only the providers with the highest clinical standards and best outcomes are thriving. As Slocum pointed out, the “winners” in the autism therapy market are those companies that prioritize high-quality clinical care and outcomes, especially as payers—such as insurance companies and government programs—become more discerning in their reimbursement decisions.
While Goldman Sachs Alternatives’ acquisition of CSD may not be part of a broader wave of M&A activity in the sector, it does signal a continued interest in the autism therapy market. The deal could have implications for future investment in the space, particularly as other investors seek to emulate Goldman Sachs’ inclusive growth strategy.
The Role of NMS Capital in the Deal
NMS Capital has played a crucial role in the growth of the Center for Social Dynamics. The private equity firm initially invested in CSD in 2019, providing a substantial capital commitment to support the company’s expansion. Since then, NMS Capital has helped facilitate CSD’s series of acquisitions, positioning the company for continued growth.
Interestingly, NMS Capital has chosen to reinvest in CSD as part of the deal with Goldman Sachs. This decision reflects the ongoing confidence in CSD’s business model and future prospects. Although the exact proportion of equity held by Goldman Sachs and NMS Capital in the newly acquired company is unclear, the reinvestment by NMS suggests that the private equity firm remains committed to CSD’s success.
The collaboration between Goldman Sachs Alternatives and NMS Capital is a testament to the shared vision between the two firms. Both firms are focused on expanding access to high-quality care, making the acquisition of CSD a natural fit for both parties.
What This Acquisition Means for the Future of Autism Therapy
The acquisition of the Center for Social Dynamics by Goldman Sachs Alternatives marks an important milestone in the autism therapy industry. With its expansive network of providers, omnichannel service delivery model, and commitment to clinical excellence, CSD is well-positioned to continue growing and serving more families in need of autism therapy services.
Goldman Sachs’ involvement in the deal brings additional resources and expertise that could accelerate CSD’s growth trajectory. The inclusive growth platform of Goldman Sachs Alternatives sets the company apart from other private equity investors by emphasizing the importance of clinical quality in addition to financial performance.
Furthermore, the reinvestment by NMS Capital signals continued confidence in CSD’s ability to provide high-quality services while expanding its reach. The combined resources of Goldman Sachs and NMS Capital could provide CSD with the tools it needs to continue expanding its services and improving outcomes for families affected by autism.
The broader autism therapy market is likely to continue evolving, with an increasing focus on high-quality care and measurable outcomes. As the market matures, the companies that prioritize these factors are likely to emerge as leaders. Goldman Sachs Alternatives’ approach to investing in CSD offers a promising example of how investors can drive both business growth and positive social impact in the healthcare sector.
The Bigger Picture: Trends in Autism Therapy Investing
The Center for Social Dynamics acquisition by Goldman Sachs is part of a larger trend of growing interest in autism therapy services, driven by the increasing demand for high-quality care for children with autism and other developmental disorders. The market for autism therapy services has expanded rapidly in recent years, and while the pace of mergers and acquisitions may have slowed, there remains significant potential for growth.
With organizations like Goldman Sachs Alternatives taking an active interest in the space, the future of autism therapy appears bright. By combining financial resources with a focus on clinical excellence, these investments could help ensure that more children and families receive the care they need.
For now, the acquisition of CSD by Goldman Sachs Alternatives represents a significant moment in the ongoing evolution of autism therapy services. It underscores the importance of high-quality care and highlights the growing role of private equity in shaping the future of the healthcare industry. As the demand for autism therapy services continues to rise, we can expect more deals like this to emerge, driving innovation and improving outcomes for those who need it most.
