Addiction treatment providers Advanced Recovery Systems and Pyramid Healthcare are reportedly preparing for a sale. Both providers are focused on the substance use disorder industry and are private equity-backed.

According to reports from Axios, Advanced Recovery Systems, an addiction treatment provider that operates in nine states, is currently up for auction.

The Goldman Sachs-backed company is working with BMO on the active auction.

Behavioral Health Business reached out to Advanced Recovery Systems to confirm this, but has yet to receive a response.

Goldman Sachs was also contacted for input on this story, but declined to comment.

Advanced Recovery Systems received $75 million in lending assistance from White Oak Healthcare Finance in 2021 and announced in 2023 that it had treated 50,000 patients since it opened in 2013.

Pyramid Healthcare, another addiction treatment provider that operates across five states, is also anticipated to go to market next year with backing from private equity firm Nautic Partners.

Nautic Partners acquired Pyramid in 2021 from Clearview Capital, Northstar Capital and Brookside Capital Partners.

Since then, Pyramid has pushed to add 400 more beds across its locations and has opened several new treatment centers and underwent its first CEO change since the company’s inception. At the time, Pyramid executives told BHB that M&A activity would likely have a role in its future.

With Jason Hendricks, Pyramid’s CEO since 2024 at the helm, as the company aims to go to market in the next year, it remains to be seen if additional C-suite changes could be on the horizon.

BHB reached out to Nautic Partners and Pyramid Healthcare to confirm these details and request comment. This story will be updated if new information is received.

The landscape

While dealmaking in the behavioral health space has cooled after the all-time highs of 2021 and 2022, many predicted an uptick in transactions in 2025. However, after a strong start to the year, deal announcements began to slow in Q2.

According to a report from M&A advisory firm Mertz Taggart, Q2 saw the fewest deals since the onset of the COVID-19 pandemic.

Still, there may be more transactions completed than reported to the public.

“We are seeing a trend of fewer deal announcements,” Kevin Taggart, managing partner at Mertz Taggart, said in the report. “Private equity’s push into healthcare has been under public and regulatory scrutiny over the past 12 to 24 months. Many of these groups would prefer to keep these transactions under the radar to the extent they are able. It’s not an attempt to avoid regulators, but rather, they don’t see the benefit in announcing.”

Still, there could be more M&A to come in the SUD space in the future. For example, several reports claim that private equity firm Webster Equity is looking to sell BayMark Health Services, the largest addiction treatment provider in North America.