FFL Partners, Two Sigma Impact Acquire Majority Stake in OUD Treatment Provider Community Medical Services

Middle market-focused private equity firm FFL Partners and Two Sigma Impact announced Tuesday that they have acquired majority ownership in addiction treatment provider Community Medical Services (CMS).

San Francisco-based FFL and Two Sigma Impact – which is a division of New York-based hedge fund Two Sigma – are purchasing the stake from Clearview Capital, which originally invested in the company in 2018.

“Both groups share our conviction that a strong patient-centric focus on quality care will lead to the greatest outcomes and the most sustainable value, and we look forward to the impact our strategic partnership will have in our fight to help heal those suffering from addiction,” CMS CEO Nick Stavros said in a press release.


Headquartered in Scottsdale, Arizona, CMS operates over 45 clinics across nine states for opioid use disorder (OUD).

CMS provides MAT drugs includings buprenorphine, methadone, and naltrexone, along with offering counseling and behavioral therapy to patients. CMS is targeting $100 million of revenue in 2021, according to PE Hub sources.

Founded in 1983, CMS is recognized for having opened the nation’s first 24-hour, on-demand OUD treatment clinic, which began operating in Phoenix in 2017.


“Society has a punitive mindset about people who use drugs,” Stavros told PE Hub. “CMS provides compassionate care and harm reduction in a nice, inviting environment, a place where they can heal.”

More than 75,000 Americans died from opioid-related overdose deaths during a 12-month period ending in April 2021, the Centers for Disease Control and Prevention reported last month.

Stavros, whose sister died from a heroin overdose approximately 20 years ago, told PE Hub that he was looking for business partners who specifically shared CMS’s “mission, vision and values of putting patient care first and who looked to us to put a huge dent in the opioid crisis.”

In talking about the investment side of the deal, Chris Harris, who is a managing partner at FFL Partners, said that his firm is likewise attracted to providers such as CMS that adhere to quality standards in treatment.

“We have been active in the behavioral health space for sometime now and have spent the past several years looking to make an investment in the medication assisted treatment space,” Harris told PE Hub. “When we had the opportunity to meet with the CMS team, it was clear that they were looking to build something different.”

Geoff Liberthal, who is a partner at Two Sigma Impact, commended CMS for what he believes is the provider’s work in improving access to MAT treatment through new clinics.

“CMS is on the cutting edge of addressing supply issues and providing quality treatment,” Lieberthal told PE Hub. “They have a track record of opening up new locations in new geographies.”

CMS currently operates in Arizona, Alaska, Indiana, Michigan, Montana, North Dakota, Ohio Texas and Wisconsin. The provider has plans in the works to soon open its first clinics in Colorado and Minnesota.

“CMS’s dedication to not only providing treatment but improving access for those who otherwise would not have been able to receive care was something that really resonated with our team,” Harris further told PE Hub.

The CMS purchase represents a gradual growth of investment activity within the OUD market, which is currently estimated at nearly $2.7 billion and is expected to almost double to around $4.8 billion by 2028.

Along with the CMS deal, virtual OUD treatment provider Ophelia Health announced last week that it had raised $50 million in a Series B funding round led by Tiger Global Management LLC. Another virtual OUD treatment provider, Bicycle Health, also made waves this summer when it raised $27 million in Series B funding round led by Questa Capital Management.

Financial terms of the deal were not disclosed.

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