Outpatient mental health provider Nystrom & Associates Ltd. is working through a deal to acquire Ellie Mental Health’s Minnesota clinics.

While still pending regulatory review, the deal would move the 25 locations of Ellie Mental Health—Minnesota to Nystrom & Associates. This would deepen Nystrom’s footprint in Minnesota: 42 of its 59 locations listed on its website are in Minnesota.

“The combined company will have 84 locations across five states and approximately 1,400 clinicians providing 1.4 million mental health appointments annually,” Shannon Beaudin Klein, chief marketing officer for Nystrom & Associates, told Behavioral Health Business.

Sources tell Behavioral Health Business that the sale of the Minnesota clinics represents a shift for Ellie Mental Health to a pure-play franchise model. Klein did not comment on this change. Representatives of Ellie Mental Health have not responded to a request for comment.

Ellie was founded in 2015 as a traditional outpatient mental health provider and eventually grew to operate several of its clinics in Minnesota and launched a franchising business, called Ellie Fam LLC, in 2022. Now-former Ellie Mental Health CEO Erin Pash previously told BHB that the Minnesota clinics were totally owned by the company and acted as the test grounds for initiatives and systems that could be shared with franchisees. Before the deal, the company said it had 260 corporate and franchise locations.

In 2022, Ellie Mental Health struck a deal with Dallas-based franchisor and multi-unit investor Princeton Equity for an undisclosed amount of investment capital. At the beginning of the year, the company announced the succession of Pash.

Nystrom & Associates is backed by the private equity firm Nautic Partners. The firm acquired a majority stake in the company in 2019. It named its current CEO, Mark Peterson, to the role in 2023. Later that year, the company’s founding executives departed their executive leadership roles.

Nystrom & Associates offers psychiatry, psychology, and substance use disorder services. It introduced transcranial magnetic stimulation in June 2024, adding it as a service line in its Eden Prairie, Minnesota, and Iowa City, Iowa locations.

“By coming together, we will strengthen our clinical and operational capabilities and make care more accessible. That’s a win for patients, clinicians and communities,” Klein said.