Private Equity Investment is Driving Behavioral Health to New Levels

By Eric YetterPublished On: August 9, 2021

Private Equity investment in behavioral health is projected by many to reach an all-time high in 2021 as investors seek to cash in on the growing demand for therapeutic services. The Covid-19 pandemic was a major catalyst for this increased demand, but the vertical was gaining momentum before that as the industry worked to destigmatize this very real health issue through increased awareness and better understanding.

The vertical has also made strides to increase professionalism, find the best treatment solutions, improve diagnosis, become more data-driven and increase treatment access. In essence, the industry is becoming much more accepted and “mainstream”.

Private Equity is playing a major role here. Their significant capital investment, ability to attract top-notch clinical leadership and proficiency at leveraging business resources is taking the industry to a new level of professionalism. PE seeks to provide better patient care and build a business that delivers strong returns to their investors.

Focus on BlueSprig Pediatrics

A great example of that is KKR’s investment in BlueSprig Pediatrics in 2018. The extensive market research that led them to invest in BlueSprig uncovered a market that their head of healthcare strategic growth, Ali Satvat says has been “underserved and underdiagnosed” for a long time. KKR saw children and families in need and an extremely attractive business opportunity. They set out to “change the world for children with autism” and make BlueSprig the premier provider of the highest standard in Applied Behavior Analysis (ABA) therapy for children.

Autism may be the fastest-growing developmental disability. According to a March 2020 report from the Centers for Disease Control and Prevention, one in 54 eight-year-old children had ASD as of 2016. That is up from one in 150 in 2002. The number of cases has been on an upward trend for the last two decades. More than 3.5 million Americans live with ASD, according to another study.

Since its acquisition by KKR in 2018, BlueSprig has expanded across 18 states through a series of capital investments and strategic acquisitions. They are well on their way to building a national organization with the best suite of therapeutic offerings for child autism.

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Eric Yetter is an investment banker focused on healthcare. His practice includes healthcare provider services, home health and hospice, and behavioral health. Mr. Yetter has completed a variety of healthcare transactions, many with private equity firms and PE-backed companies. His past clients include leading physician groups, healthcare facilities, and institutional healthcare investors. Mr. Yetter founded Physicians First in 2016, recognizing the emerging need for investment banking and advisory services for owners of physician practices, surgery centers and clinical businesses. The next four years saw record levels of physician-owner M&A activity and Physicians First became one of the nation’s most active advisors for transactions between private equity firms and medical practices. In 2021, Mr. Yetter agreed to merge Physicians First with FOCUS and lead the firm’s healthcare team. Mr. Yetter also has healthcare operating and investing experience. He was an early executive at Covenant Physician Partners (previously Covenant Surgical Partners), an acquirer and operator of ambulatory surgery centers and physician practices. The company built and operated an outsourced laboratory, an anesthesia business, and a revenue cycle management company. Covenant has grown into a major player in healthcare services and is currently backed by private equity firm KKR. Prior to Covenant, Mr. Yetter held operating roles at Volkswagen Group of America and Brainlab, Inc., an image guided surgery company. While at Brainlab, Mr. Yetter worked with leading neurosurgeons and hospitals to implement cutting edge technology and improve patient outcomes. Mr. Yetter is a licensed attorney (currently inactive) and earned JD and BS degrees from Vanderbilt University, graduating with high honors. He is a FINRA licensed investment banker.