The Carlyle Group (Nasdaq: CG) is reportedly considering a sale of its teen rehab business Newport Academy, according to PE Hub, which cited sources familiar with the process.
The upcoming sale is expected to yield a valuation of more than $1 billion dollar, the publication further reported.
With locations across the East and West Coasts, Newport Academy treats patients ages 12 through 22 who are struggling with depression, anxiety, eating disorders, trauma, substance use disorder (SUD) and dual diagnoses. It offers residential treatment and outpatient programming, as well as day schools.
Meanwhile, the Carlyle Group is a multinational PE giant with $245.8 billion in assets under its management. In the behavioral health space, that includes companies like Newport Academy and Odyssey Behavioral Health, which has more than 20 locations across eight states and specializes in intensive residential services.
In 2017, the Carlyle Group told PE Hub it had made an investment in Newport Academy, which generated an estimated $20 million in EBITDA around that time, sources told the publication. Meanwhile, sources told PE Hub that Newport Academy’s EBITDA currently exceeds $80 million and that the sale process is expected to launch in the next couple of weeks.
The Carlyle Group isn’t the only PE powerhouse preparing for a behavioral health exit. Just a few weeks ago, news broke that Welsh, Carson, Anderson & Stowe is also reportedly looking to sell SpringStone, its network of more than 30 behavioral health facilities. According to PE Hub, the seller is targeting a valuation upward of $1 billion.
Additionally, the sale rumors come amid record deal flow for the behavioral health industry, with experts predicting M&A could reach a new peak in 2021.