Transactions: Sabra Expands Behavioral Portfolio; Autism Acquisitions with National Scale

Acorn Health acquires Sandcastle Centers

Acorn Health — a national provider of applied behavior analysis (ABA) therapy — has acquired the assets of Sandcastle Centers, formerly known as JKP Analyst, which also provides ABA services.

Financial terms of the deal were not disclosed.

Founded in 2018, Acorn is a portfolio company of the private equity (PE) firm MBF Healthcare Partners. It provides center-based and in-home ABA therapy services to children with autism and has locations in Michigan, Illinois, Virginia, Florida, Maryland, Pennsylvania, and Tennessee.

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Meanwhile, Sandcastles provides center-based and in-home services in the Orlando, Florida area.

“The addition of this team will allow us [to] deliver best-in-class ABA services to more families in need in the Orlando area,” Vicki Kroviak, CEO of Acorn Health, said in a press release announcing the news. “This acquisition is central to our goal of adding clinical talent and operational capabilities as we continue to rapidly expand in our core markets.”

Sabra expands behavioral portfolio

Sabra Health Care REIT (Nasdaq: SBRA) — a national real estate investment trust company focused on health care — is continuing to build out its slow growing behavioral health portfolio. The Irvine, California-based company has acquired a former senior housing facility in Gulf Breeze, Florida, which it plans to convert into a substance use disorder (SUD) treatment center.

Sabra shared the news at the same time it announced the acquisition of a 100-unit senior housing facility in Augusta, Georgia, which will remain a senior housing facility.

The company purchased both facilities for an aggregate $28.5 million. It plans to put up to another $3 million into the vacant Gulf Breeze, Florida location to convert it into a 60-bed addiction treatment center, according to a press release announcing the news.

Landmark Recovery, a SUD provider that currently leases five addiction treatment facilities from Sabra, will occupy the space. Sabra added the facility to an existing triple net master lease it has with Landmark, according to the press release.

That lease has an initial 15-year term and an initial cash yield of 9.0%, which escalates every year at either the greater of CPI or 2.0%.

While behavioral deals still make up a small portion of Sabra’s overall portfolio, CEO Rick Matros has said he is committed to slowly growing the segment. Last year, he told BHB he is open to exploring a number of opportunities in the behavioral space, with an eye on those that are “a little bit more institutional.”

The Stepping Stones Group acquires EBS Healthcare

The Stepping Stones Group, a PE-backed autism provider, has purchased EBS Healthcare, which offers behavioral health and therapeutic services to children on the autism spectrum.

Terms of the deal were not disclosed.

The transaction creates a “a premier, national provider of therapeutic, behavioral, autism, nursing and educational services to children in school, home and community settings,” according to a press release announcing the news.

Stepping Stones is a portfolio company of Five Arrows Capital Partners, the North American corporate PE arm of Rothschild & Co. Merchant Banking. It provides therapeutic and behavioral health services to children with autism and other intellectual disabilities, serving 600 clients and 140,000 children annually in educational and community settings across 37 states.

Meanwhile, EBS provides clinic, school and home-based behavioral health and therapeutic services to children with autism, special needs and developmental and behavioral issues.

The new company will be led by a combined leadership team and serve children and families across more than 900 school districts in 42 states. However, EBS and Stepping Stones will remain legally separate entities and market their respective brands, according to a press release announcing the news.

“This transaction marks a major milestone in our investment thesis of scaling nationally to address the unmet needs of families, school districts and diagnosticians seeking a partner to deliver critical developmental services to children and adolescents,” Michael Langer, Partner at Five Arrows Capital Partners, said in a press release announcing the news. “We are proud to support Stepping Stones’ acquisitive growth strategy as they continue to expand the company’s national footprint, service offerings and settings.”

Commercial real estate firm closes sale of SUD facility

The Behavioral Health Properties Group of Swopes Lees Commercial Real Estate has closed the sale of a 34-bed, inpatient detox and residential substance use disorder (SUD) treatment center in Hanover, Pennsylvania.

Clarity Way was purchased by a New Jersey-based behavioral health provider looking to expand its operational footprint into the area, according to a press release announcing the news. Terms of the transaction were not disclosed.

Headquartered in Juno Beach, Florida, Swope Lees’ Behavioral Health Properties Group helps behavioral health clients nationwide with both buy-side and sell-side real estate and business transactions. It specializes in SUD treatment properties.

For the sale of the aforementioned Hanover-based SUD treatment center, which is known as Clarity Way, Managing Directors Joshua Slaybaugh and Michael Cabot represented the seller in the transaction.

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