Mergium analyzes mergers and acquisitions and capital raises (private placements) activity for autism services and pediatric therapy practices from 2019 to 2024.
M&A – The numbers
The following graph presents the number of mergers and acquisition transactions (sales of practices) by buyer type on an annual basis from 2019 to 2024:


Source: Mergium research.
Notes:
This analysis:
Focuses on practices that offer: (1) therapies for kids and young adults with autism and other disabilities; (2) treatments such as behavioral (applied behavioral analysis (ABA)), developmental (speech, occupational, physical, feeding therapies, and others), educational, and social relational; (3) services in-clinic, in-school, in-home, and/or telehealth; and (4) testing for autism.
Excludes companies that develop and market solutions, products, and tools to providers and families such as: (1) IT solutions (software, apps, and the like); (2) technologies for diagnostics tests (e.g. MARABio, Cognoa, BioROSA, EarliTec); (3) medications; (4) matching platforms; and (5) virtual reality devices.
Types of transactions and buyers:
PE (Buyout): Transactions by private equity firms (“PE”).
PE (Secondary Buyouts (SBOs)): Sale of practices by one PE to another PE.
PE (Platform): Typically, after closing of an M&A by a private equity, the acquired company (“Platform”) grows through acquisitions (“add-ons”) of smaller practices and de novo locations. The acquisitions of those smaller practices are registered here.
Strategic Buyer: These are acquisitions of practices done by a company that is not a PE, nor a Platform of a PE.
The study includes sales of majority and minority interests:
Sales of majority interests - 100% or more than 50% of shares or interests.
Sales of minority interests - Less than 50% of shares or interests.
M&A activity in 2024 was like 2023 and lower than 2019-2022
The number of transactions in 2024 was like that of 2023 (29 vs 31).
There was an increase in the buyouts by private equity firms (4 vs 1 in 2023).
Also, there was an increase in the number of secondary buyouts, because of the current holding times of private equity firms (see below). There were 4 of these transactions in 2024 compared to 1 in 2023.
We expect the number of secondary buyouts to continue in 2025 and 2026.
The M&A by strategic buyers continued strong when compared to previous years.
There was a decline in acquisitions by platforms of private equity firms. We believe there are two reasons for that: 1) the substantial number of platforms with more than 5 years of holding time; and 2) the strategy of certain players to grow via de novo locations.
At the quarterly level, there was a similar number of transactions in Q4 2024 and Q3 2024.
The total of 29 transactions in 2024 is lower than the number of annual transactions in the period 2019-2022. The reasons for the decrease in the number of transactions are: (1) high interest rates in 2023 and 2024; (2) high inflation; (3) the financial crises of 2023 (related to the collapses of First Republic Bank, Silicon Valley Bank and Signature Bank) that created uncertainty and instability in the financial sector; (3) a gap in valuations expectations between buyers and sellers; and (4) the compression in margins due to wage pressures in an industry with rigidities on the price of service.
High interest rates, high inflation, and the financial crises of 2023, certainly brought uncertainty to the economic environment and therefore created a negative impact to M&A activity.
M&A - PE Holding Times will favor M&A activity
Typically, PEs hold platforms for an average of 5 years. Close to 45% of platforms as of the end of Q3 2024 had holding times greater than 5 years. Those platforms will be looking for an exit. This will increase the number of secondary buyouts. Once those platforms are sold, they will also do additional M&A transactions (add-ons).

Source: Mergium research.
Private Placements
The graphs below present the number of private placements (debt and equity) on a quarterly basis as well as the values of those private placements:

Sources: Mergium research, Securities and Exchange Commission.
Notes: Private placement: These are acquisitions of shares and debt instruments by private investors when a company sells newly issued shares or acquires debt. These transactions are regulated by the U.S. Securities and Exchange Commission.

Sources: Mergium research, Securities and Exchange Commission
Investors continue to be interested in pediatric therapy companies. There is a combination of interest in funding the traditional delivery model (in clinic, in home, in school) and some sort of combination with digital solutions in the service delivery.
There were 8 private placements in 2024 compared to 7 in 2023. But the values were higher ($207 mm vs $140 mm). Our view is that this type of capital raise should be increasing over time, when owners know about this type of capital raise available in the capital markets and with the professionalization of the smaller practices.
What To Expect Moving Forward
We expect an increase in M&A activity and private placements in 2025 and 2026. Obviously, there are several moving parts that will determine how strong or weak that increase will be, including the evolution of interest rates, inflation, closing of gap in valuation expectations, and macro and health sector policies of the new Trump Administration.
With the significant amount of PE dry power (capital available to be invested) and the relative high levels of fundraising by focused healthcare PE in the last few years, as well as the long holding times of platforms in this space, we expect continuation of investments by PEs via buyouts and secondary buyouts.
What the Buyers Are Telling Us
Buyers in this segment are interested in M&A transactions with targets that offer a good number of the following characteristics: 1) Good clinical outcomes; 2) Medicaid compliance; 3) Growing revenue and sustainable and healthy margins; 4) Diverse payor mix; 5) Growth opportunities; 6) Low therapist turnover and good management in place; 7) Good information systems (financial, operational); 8) Robust internal processes; 9) Good training models and healthy learning environments; and 10) Sellers’ valuation expectations in line with the current macroeconomic situation and economics of the segment.
Additional resources:
If you need assistance selling or valuing your pediatric therapy practice, contact us.
If you need to read more about how to sell your pediatric therapy practice (ABA, OT, PT, ST), click here.
If you need to read more about selling a business, read more
If interested in reading more articles and insights by Mergium, click here
If interested in knowing about our experience in selling / acquiring healthcare services companies, click here