VSS and NewSpring Health Capital have formed BRC Healthcare to acquire BRC Recovery Family of Programs, a provider of addiction treatment services.
BRC’s addiction treatment services are provided to adults over the age of 17 that have substance use disorders such as alcoholism, drug dependence and other addiction disorders. The company, led by CEO Drew Rothermel, was founded in 2006 by Marsha Stone and is headquartered in Austin, Texas. Ms. Stone will remain at BRC and continue to serve as its chief strategy officer.
According to the National Alliance of Mental Illness as well as other industry reports, the mental health services market is expected to grow at a compound annual growth rate of 4.6 percent throughout 2020, with the U.S. market for inpatient treatment expected to total more than $5 billion. There are approximately 44 million adults who experience mental illness in the U.S. in any given year.
“BRC has an excellent reputation for its outstanding treatment programs, talented staff and its ability to generate consistently positive patient outcomes,” said Jeffrey Stevenson, a managing partner of VSS. “Together with NewSpring, we look forward to empowering BRC with the resources it needs to advance its high-quality continuum of care and pursue potential acquisitions of complementary programs in communities where demand for established behavioral health programs continues to grow.”
New York-based VSS (formerly Veronis Suhler Stevenson) makes control and non-control investments from $10 million to $50 million in companies with $1 million to $25 million of EBITDA that are active in the business services, healthcare IT and services, education and information sectors. Investments can take the form of mezzanine debt, subordinated debt, preferred and common equity.
VSS has made a number of recent investments in the healthcare sector including Ascent Behavioral Health, a Boise, Idaho-based provider of behavioral health treatment services to adolescents (acquired in February 2020); Caravan Health, a Kansas City, Missouri-based provider of advisory services to hospitals and physician practices (acquired in January 2018); and Endo1 Partners, a Novato, California-based provider of business and operational support services to endodontics practices (acquired in December 2019).
“At NewSpring, we’re always looking to invest in healthcare companies that bring innovative ideas and ways of thinking to markets in need of new solutions. This is exactly what BRC is doing in the addiction treatment and therapeutics space,” said Kapila Ratnam, PhD, a partner at NewSpring. “We’re thrilled to work with VSS to bring operational expertise to BRC and make additional investments in transformative healthcare companies.”
NewSpring Capital is a provider of private equity capital through a family of funds including NewSpring Ventures, NewSpring Health, and NewSpring Mezzanine. Sectors of interest include business services, healthcare, information technology, and specialty manufacturing. The firm is headquartered in the Philadelphia suburb of Radnor, Pennsylvania.
Private Equity Professional | April 14, 2020