Private equity firm Avesi Partners has acquired substance use disorder (SUD) provider First Steps Recovery.
The Fescno, California-based provider offers addiction care to adults. Its services include medical detox, residential treatment, partial hospitalization (PHP), intensive outpatient programs (IOP) and virtual care.
First Steps Recovery can treat patients for several conditions, including alcohol use disorder, opioid use disorder, cocaine use disorder, and meth use disorder. It is also able to treat several mental health conditions, including anxiety, depression, bipolar disorder, and eating disorders.
“Patients and payors continue to express strong demand for quality addiction treatment services focused on meeting patients where they are able to drive outcomes and long-term recovery,” Pete Tedesco, managing director at Avesi, said in a statement. “We see a compelling opportunity to help FSR leverage its track record of success to extend services into additional geographies, care settings and programs.”
The provider’s scope is currently focused on Central California, but it plans to move into new markets and states post-acquisition. It works with several payers, including Anthem, Aetna, Kaiser Permanente, and Cigna.
The terms of the deal were not disclosed.
Avesi Partners has a history of working in the behavioral health sector. In 2023, the firm acquired adolescent behavioral health provider Muir Wood Capital. Its portfolio also includes Point Quest, an adolescent behavioral health and special education services provider.
“Avesi’s commitment to further our core mission of providing best-in-class addiction treatment care, the strong cultural fit between our organizations, and their expertise and resources within the behavioral health market made choosing Avesi as our partner an easy decision,” Josh Beauchaine, founder and President of First Steps Recovery, said in a statement. “Their experience helping scale high-growth healthcare services companies will be invaluable as we drive towards our goal of becoming the nation’s leading SUD treatment provider.”
Overall, deals in the SUD space are down year over year. In 2023, there were 45 deals in addiction care, compared to 66 in 2022, according to a report by M&A advisory firm the Braff Group.
While deals across behavioral health were down in 2023, the PHPs and IOPs sector had a record-breaking year. In 2023, there were 17 deals in the PHP, IOP and counseling sectors.