Odyssey Behavioral Healthcare Quietly Trades to PE Firm JLL Partners

Brentwood, Tennessee-based Odyssey Behavioral Healthcare traded quietly late last year to a new private equity backer, Behavioral Health Business has learned.

In November, New York City-based JLL Partners acquired Odyssey Behavioral Healthcare from the international investment firm The Carlyle Group. The latter firm acquired Odyssey in December 2018. BHB previously identified Odyssey as one to watch for a potential acquisition.

Representatives of JLL Partners and the Carlyle Group have not responded to a request for comment. Odyssey Behavioral Healthcare declined to comment.

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The investment bank Moelis & Co. (NYSE: MC) worked on the deal, apparently on the Odyssey-Carlyle Group side. Mergermarket reported in July that Odyssey retained Moelis to advise on a potential sale. That reporting stated that the diversified behavioral health company generated $55 million in adjusted earnings and was expected to fetch a double-digit multiple.

The terms of the deal were not disclosed.

Odyssey Behavioral Healthcare focuses on facility-based behavioral health care that addresses substance use disorder (SUD), eating disorders, mental health disorders and process disorders. It offers residential and outpatient health care. Its website lists 55 total locations.

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The company has consistently opened new de novo sites over the last few months. Most recently, it announced the opening of an outpatient center to treat co-occurring addiction and mental health conditions under its STR Behavioral Health brand in Lancaster, Pennsylvania. The new location treats adults and offers partial hospitalization programming (PHP), intensive outpatient programming (IOP) and medication-assisted treatment (MAT).

Toward the end of 2023, Odyssey Behavioral Healthcare pulled back slightly on eating disorder services. It closed the 28-year-old Shoreline Center for Eating Disorder Treatment’s operations in southern California. That closure coincided with other diversified behavioral health companies trimming their eating disorder treatment business, reflecting the sensitivity of an already difficult-to-operate line of business in an increasingly challenging economy.

That a financial buyer acquired Odyssey Behavioral Healthcare may be indicative of a wider sentiment that private equity finds investment in behavioral health entities worthy of consideration. A recent survey of PE executives found that most think that behavioral health is a top or increasingly relevant consideration for health care investors.

At least two months after the acquisition, the Odyssey Behavioral Healthcare leadership team remains intact. Richard Clark, CEO since May 2021, continues to be listed as the organization’s top executive. He took on the role to succeed founder and now-former CEO Scott Kardenetz.

One of his priorities over the last few years has been growing outpatient care offerings. At a BHB event, Clark said that payers are especially concerned about access to a variety of care settings for members. That has been an increasingly potent driver of the diversification of behavioral health services over the past several years, he and other executives said during a panel conversation at INVEST 2022.

“Payers like to see that … you can step the clients up and down in your continuum, but you’re not stepping them into high-cost treatment environments,” Clark said. “These different verticals provide an array of services. Payers like that, and I think that’s been [part of] our success.”

Other active health care companies in JLL Partners’ portfolio include the outpatient mental health platform Hightop Health, which launched in October 2023.

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