Amwell (NYSE: AMWL) has sold its virtual psychiatric business to clinician-to-clinician telehealth provider Avel eCare for $21 million.

The deal allows Amwell and Avel to focus on their core operations, Avel’s CEO Doug Duskin told Behavioral Health Business.

“[Amwell is] focusing on technology as their primary service,” Duskin said. “We’re more of a technology-enabled service company. … So it made sense for them to focus on their core, and it made sense for us to focus on our core.”

Boston, Massachusetts-based Amwell is a hybrid care delivery enablement platform that offers products for providers, payers and employers. Divesting the psychiatric business Amwell acquired in 2019 and named Amwell Psychiatric Care (APC) allows the company to focus on growing its digital platform and improves its ability to achieve its goal of being cash flow positive in 2026, according to the company.

Amwell will continue to provide behavioral health services through its affiliated clinical partner Amwell Medical Group, which offers therapy, psychiatry and a digital, on-demand mental health solution called SilverCloud.

“This move will enable us to continue to streamline our portfolio of services and pursue core channels of profitable growth while powering the digital care aspirations of our clients,” Angela Vogen, head of communications and content, told BHB in an email. “Amwell remains committed to the behavioral health space. Divesting APC allows us to focus on what we do best – enabling longitudinal-based care, which is where we’re seeing the greatest demand in behavioral health.”

The deal opens up a new customer demographic for Sioux Falls, South Dakota-based Avel. Before the acquisition, Avel mainly served rural, critical-access community hospitals. Amwell’s psychiatric care group included more tier-one and two hospitals, Duskin said. The deal also increases Avel’s geographic footprint from 41 to 46 states.

Avel is a virtual health network that has partnerships with over 650 hospitals, health systems, government bodies, schools, senior care communities and law enforcement and EMS agencies. The company provides behavioral health, crisis care, critical care, emergency services, school health, virtual nursing, and several other health care offerings. Private investment firm Aquiline Capital Partners acquired Avel from Avera Health in 2021.

The acquisition is first in part of what Duskin calls a “year of growth,” though the company has been growth-minded for several years. In the past two years, Avel has completed five acquisitions, including one that closed in late December. The company’s growth strategy includes both organic and acquisitive growth.

Avel’s behavioral health business primarily provides emergency department assessments, as did Amwell’s. The acquisition expands Avel’s emergency department assessment services and adds to its inpatient capabilities.

Duskin plans to continuously monitor the behavioral health market for opportunities to evolve the company’s services. In particular, he has his eyes on home health behavioral offerings. While looking for ways to grow the business, he is focused on keeping true to the company’s mission and revenue model.

“We’re a clinician-to-clinician telemedicine business. We want to stay in that area,” Duskin said. “We don’t do much outpatient because we want to maintain that clinician-to-clinician model. But I think as we continue to evolve in the marketplace and delivery of care continues to evolve, hospital census changes and as we reach outside of the four walls of a hospital to still provide service to that clinical group, but to a patient that may be at home or maybe in a different delivery center, we will continue to evolve to meet those needs of our customer.”