M&A Advisor: With Highest Multiples in Behavioral Health, Autism Market is ‘Out of Control’

As the need for behavioral health services continues to increase, so does buyer interest in the $230 billion industry, which advisors say is growing 4% every year. However, all deals in the space are not created equal.

For example, despite being one of the smallest and most immature subsectors within behavioral health care, the $7 billion autism market sees the industry’s highest multiples, according to Dan Davidson, managing director at Coker Capital Advisors, an investment bank that specialized in M&A advisory to middle market healthcare companies.

“In autism [multiples are] upwards of 20 times in some cases,” Davidson said. “But even small $1 million EBITA providers are getting north of 10 times — and sometimes even well above that. That truly is an out of control marketplace.”


Davidson made those comments earlier this month during a webinar hosted by Polsinelli, a Kansas City, Missouri-based law firm with more than 875 attorneys in 21 offices nationwide. The presentation covered what executives and investors should consider when buying or selling a treatment center.

The story behind autism’s especially high multiples is one of supply and demand, Davidson explained during the presentation.

“There’s not [as many] sponsored platforms as the others,” Davidson said. “It is highly fragmented, mostly mom-and-pop and reimbursement is relatively unstable.”


While it’s true that autism is characterized by especially high multiples, it’s also worth noting that valuations in the subsector are highly variable. 

“[Valuations] are dependent on so many factors, but the size and maturity are probably the most significant,” he said, noting that his firm has completed 14 behavioral health transactions in the past 10 years, with another four currently under engagement.

The same is true across other behavioral health markets as well, Davidson explained during the presentation. While not as eye-popping as autism, more mature subsectors within behavioral health — such as eating disorder treatment and psychiatric care — see similarly attractive and variable valuations.

For example, multiples within the $4.3 billion eating disorder subsector typically fall within the range of five to 14 times, Davidson said.

Meanwhile, intellectual and developmental disabilities (IDD), which is the largest of any behavioral health subsector, posts multes in the five to 10 times range.

Additionally, residential substance abuse is a $12 billion market, Davidson explained, with multiples typically falling between 8 and 11 times.

Finally, the $18 billion acute psychiatric market is the most mature subsector with multiples of about 11 times “for a mature platform,” Davidson said.

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