James Bailey, a veteran behavioral health executive, saw his son enter a mental health facility in 2023. A little more than a year later, Bailey acquired the company that helped his son recover.

On Thursday, Bailey’s company, Paramount Health Management, announced its acquisition of St. George, Utah-based Life Launch Centers and its four facilities in the Beehive State.

“There are not a lot of platforms out there in behavioral health at this point,” Bailey told Behavioral Health Business. “They’re either out of network or have some insurance problems, or they haven’t built up. … That’s what I was looking for, a mom-and-pop that I could jump in and take over.”

Bailey, who was formerly chief operating officer for Discovery Behavioral Health and an executive with Acadia Healthcare (Nasdaq: AHCH), told BHB he identified an opportunity for someone with his experience to nurture a small organization into a larger platform.

He plans to build Life Launch Centers up to 50 outpatient programs within five years.

Bailey founded Paramount Health Management with the intention of partnering with a private equity firm to acquire and grow a behavioral health care company. Just as Paramount was about to close on a PE-backed acquisition, he decided to go his own route and acquire a smaller company, namely, Life Launch Centers.

Life Launch Centers — which provides outpatient, intensive outpatient and partial hospitalization programs (IOP/PHP) — was attractive because it had solid clinical programming, several locations and a need for streamlined leadership, according to Bailey.

“There were about four operating owners,” Bailey said. “I saw it as a really good opportunity for me to jump in, do what I did at Discovery and build it out, and build out their sales and admissions because that’s where they were lacking.”

National health care M&A law firm Polsinelli provided legal counsel on the deal. 

While IOP/PHP programs are becoming more common across the behavioral health industry, Bailey said demand is so high that the sector is not yet too crowded.

Still, patients and health care workers lack a general awareness about PHP/IOP programs, according to Bailey. He attributes this to why clinical need does not always translate to people entering programs and plans to push for further education for families, schools and mental health clinicians.

When his son entered the hospital for his mental health needs, the discharge team had no idea about the existence of these programs, he said.

“If everyone understood what IOP was, I think every place would be full,” Bailey said. “There would be a waiting line of people to get licensed and get in business doing IOP. I think really the problem is the understanding, the communication and the knowledge.”

Bailey plans to rebrand Life Launch Centers as Anxiety, Trauma and Depression Treatment Centers and expand it into northern Utah, southern Idaho, California and Texas.

Paramount Health Management won’t acquire another company any time soon, Bailey said, but he is considering partnerships with other programs in the Utah area in which Paramount Health Management would provide sales and admissions assistance.