Community Psychiatry Doubles Facility Count, Becomes Bi-Coastal With Latest Acquisition

Community Psychiatry, which provides outpatient behavioral health services at over 40 locations throughout its home state of California, has started to realize its nationwide expansion ambitions with the purchase of Durham, North Carolina-based MindPath Care Centers. The acquisition more than doubles Community Psychiatry’s facility count and establishes its presence in the Southeastern U.S.

Terms of the deal were not disclosed.

Founded in 1994, MindPath Care operates more than 25 locations in North Carolina and South Carolina, providing outpatient mental health care, as well as substance use disorder (SUD) services including medication-assisted treatment (MAT).

Meanwhile, Sacramento-based Community Psychiatry was founded in 1995 and is owned by the private equity firms Centerbridge Partners and Leonard Green & Partners.

Community Psychiatry has had its eye on expanding beyond California for a while now, as CEO Christopher Brengard told Behavioral Health Business earlier this year following the hire of several new company leaders including himself. At the time, he said the goal was to transform the company from a regional provider into one with a national presence, with the ultimate goal being to improve access to behavioral health services.

The acquisition of MindPath Care marks Community Psychiatry’s first foray outside of the Golden State, and the newly combined company will have more than 70 locations with over 350 clinicians rendering services. As part of the merger, MindPath Care CEO Jeff Williams will become the chief strategy officer of the new entity.

“We’ve spent a lot of time … looking at different companies [and] different provider groups across the country,” Brengard told BHB about the purchase. “[We are] two very similar companies, both 20 to 25 years in the making, … [with] very similar clinical models and … plans on growth.”

Both Community Psychiatry and MindPath Care provide outpatient services in person and by way of telehealth, the latter of which has been a major offering for behavioral health care providers nationwide during the pandemic, as restrictions on virtual care services have been relaxed.

But telehealth has been a significant part of Community Psychiatry’s services since the provider began offering them in 2009. Speaking to Behavioral Health Business in February, Brengard — who assumed his post with Community Psychiatry in January — talked about how the company was well-positioned to offer such services post-pandemic.

“When talking to our physicians, what they’ll tell you is that they expect for many of the patients and — certainly clinicians themselves — to continue their virtual appointments, based on preferences and clinical appropriateness,” Brengard said at the time.

With the acquisition of MindPath Care, which comes as more legislation has been proposed at the state and federal levels to make certain telehealth waivers permanent, Brengard reiterated that virtual care will be a critical part of Community Psychiatry’s future.

“There is a shortage of supply of behavioral health clinicians compared to the demand that there is across the country, and it creates inefficiencies … in certain areas, where there’s just not any availability of clinicians out there.” Brengard told BHB. “I think [telehealth is] going to be very important going forward.”

Community Psychiatry received strategic capital investments in the fourth quarter of 2020.

Brengard said the new funding has helped Community Psychiatry with its growth goals, particularly by way of M&A.

“Regardless of whether you’re growing through mergers and acquisitions, or you’re growing organically through recruitment of clinicians and through de novo, it all takes capital,” Brengard said. “To have access to capital gives us the opportunity to go out [and] not only purchase assets, but also grow [organically] and recruit physicians into new and existing locations.”

Brengard also indicated that more M&A activity and de novo growth is ahead for Community Psychiatry in 2021, singling out Texas as another target market it is seriously considering.

“We’re spending a lot of time in probably eight or 10 different states, and we’ve identified some really good assets in existing markets that we’ll continue to expand in, along with some new markets,” Brengard said. “We are spending quite a bit of time in Texas, [and] most of that is around de novo and recruitment of physicians. But we’re also in conversations with some providers throughout the state to see if it’s a good fit and makes sense for them and for us.”