Private equity group Eads Bridge Holdings has found its first partner company – a fast-growing business in the behavioral health space.
Earlier this week, Eads Bridge announced an investment in Stokes Counseling, which provides a range of therapy services to over 3,500 patients. The Naugatuck, Connecticut-based company’s specialties include individual and family therapy, stress management, youth counseling and trauma support.
The financial terms of the investment were not disclosed.
“Dr. Michael Stokes founded the practice in 2011 as a ‘single shingle’ and has since grown the platform to have over 180 clinicians that care for over 3,500 patients,” Eads Bridge said in an announcement. “Stokes Counseling is the leading independent mental health practice in Connecticut specializing in treating depression, anxiety and PTSD, with particular expertise in tailoring care for individuals in the LGBTQ+ community and families experiencing foster care or adoption challenges.”
Initially, Stokes Counseling was formed under an in-person-only model. Due to the COVID-19 emergency, however, the practice also adopted virtual care.
“[Dr. Stokes] recognized that this was an inflection point for the business and that embracing technology would augment the efficiency and efficacy of the practice,” the Eads announcement continued.
Moving forward, the partnership with Eads will give Stokes Counseling further capital to invest in the tools and technology needed to take the business “to the next level,” according to the PE firm.
Led by CEO Mark Valdez, Eads Bridge Holdings invests in post-startup-stage, profitable companies with a growing market share. Unlike many PE firms that seek three- to five-year investment windows, Eads holds businesses “with an indefinite time horizon,” its website explains.
Eads Bridge’s investment in Stokes Counseling is the latest example of PE diving deeper into the behavioral health world.
In fact, during the first three quarters of 2022, private equity deals made up more than 60% of all behavioral health transactions, according to proprietary data from M&A advisory firm The Braff Group.
Overall, 2022 is projected to be the second-highest year on record for health care private equity activity in terms of disclosed deal value and deal count, according to a recent report from Bain & Company. PE investors are anticipated to remain interested in behavioral health and health care broadly in 2023, though perhaps less active.
“Despite the slowdown in [health care private equity] deal flow in the second half of 2022, firms continued to create health care-focused funds and raise near-record levels of capital,” the Bain report explained.
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