Chicago-based private equity firm Vistria Group is in the process of buying intellectual and developmental disabilities services and housing provider Beacon Specialized Living.
Axios Pro reports that the Vistria Group values Kalamazoo, Michigan-based Beacon Specialized Living at about $300 million, a 10x multiple of Beacon’s $30 million in earnings before interest, depreciation and amortization (EBITDA).
Vistria Group is buying Beacon Specialized Living from Dallas-based health care- and business services-focused private equity firm Pharos Capital Group LLC, which invested in the company in 2016.
Founded in 1964, Beacon Specialized Living employs about 1,400 people and offers in-home support, adult foster care, child and adolescent services, clinical services, medical and psychiatric services, supported employment and job coaching, and housing. It operates in Michigan, Minnesota, Pennsylvania and New Jersey.
Beacon Specialized Living apparently is the largest for-profit provider of residential health care services of this type in Michigan. Axios reports that the investment into Beacon gives it the capital to grow organically and through dealmaking via M&A and partnerships.
Vistria Group is also an owner of Sevita, formerly The Mentor Network, which provides community-based and in-home care services for people with intellectual and developmental disabilities (I/DD). Vistria Group has not yet responded to a request for comment.
In 2021, the behavioral health industry saw a huge influx in dealmaking. The Braff Group, an M&A consulting firm with a specialty in behavioral health, tracked 25 deals in the I/DD space. Across all behavioral health segments, The Braff Group tracked 251 deals completed in the space, up about 33% from 2020.
Many of the forces that drove the growth in dealmaking in 2021 remain in 2022 though dealmaking might flag a bit as a relative shortage of companies and few potential platform deals keep valuations for all providers high.
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