Two Missouri behavioral health organizations are joining forces as Springfield-based Burrell Behavioral Health has acquired Comprehensive Mental Health Services (CMHS), which is based in Independence.
Burrell Behavioral Health, which was founded in 1977, is the second largest behavioral health provider in Missouri, employing more than 500 clinicians and serving over 40,000 clients across 25 counties in the state and in Arkansas.
CMHS, which has been in operation since 1969, provides behavioral health and substance use disorder (SUD) treatment services at 10 locations in eastern Jackson County and Kansas City. CMHS, which provides medication-assisted treatment (MAT) to patients, last year reported $16.7 million in gross revenues to the IRS.
Burrell employs 1,800 individuals while CMHS has a staff of 200 workers.
Paperwork for Burrell’s purchase was signed Friday, according to the Springfield News-Leader. As part of the deal, CMHS will retain its name brand as it becomes Burrell’s fourth regional hub.
“This is a wonderful moment for behavioral health care in eastern Jackson County and the greater Kansas City area, and just a taste of what is to come,” CMHS CEO Julie Pratt said in a written statement published by the News-Leader.
Burrell CEO C.J. Davis told the News-Leader that the company will soon announce the completion of a partnership deal for another Missouri-based behavioral health provider, Kirkland-based Preferred Family Healthcare (PFH).
PFH operates over 70 clinics across Missouri, Illinois, Kansas and Oklahoma. Around 5,000 people will be employed under a yet-to-be unveiled parent company of Burrell and PFH. That company, according to Davis, is likely to be the nation’s largest behavioral health system.
Burrell’s moves for CMHS and PFH are happening as mergers and acquisitions activity across behavioral health continues at a brisk pace. According to Dexter Braff, who is the CEO of health care advisory M&A firm The Braff Group, deal making within behavioral health could close out 2021 roughly up 40-45% from last year, which was a record level.
Rising demand during the pandemic for behavioral health assistance has been among a number of factors routinely cited as contributing to the red-hot M&A action. Braff also previously mentioned that the flurry of deals could be attributed to many buyers and bankers looking to resume transactions after putting them on hold during the onset of the pandemic.
“If you talk to a lot of [private equity] guys, they still think they’re making up for … last year,” Braff commented during a webinar last month on behavioral health M&A. “Psychologically … there’s a sense of we need to make up for a bad year.”
Davis, for his part, believes the behavioral health M&A activity has also been driven by smaller providers wanting to keep their operations going by pairing up with larger companies.
“Small centers are having a hard time staying in business,” Davis told the News-Leader. “Just from a business point of view, it makes a lot of sense for consolidation.”
Terms of Burrell’s purchase of CMHS were not disclosed.