Mertz Taggart’s Q4 2025 Behavioral Health M&A Report describes a market that stayed active but became far more selective. The firm counted 180 total behavioral health transactions in 2025, slightly up from 176 in 2024, with ~39 deals in Q4 (about 30 M&A and 9 growth deals). The report says deal timelines lengthened as lenders conducted “forensic” diligence on insurance receivables and cash collections—an effect lingering from the Change Healthcare disruption and ongoing Medicaid uncertainty. Regulators also increased scrutiny of private-equity roll-up strategies, pushing some buyers to be quieter and more cautious about market concentration. A “flight to quality” theme emerges: premium assets with strong outcomes and management still command high multiples, while distressed situations are increasingly common. By sub-sector, mental health led Q4 activity (27 deals), while addiction treatment hit a low (7 Q4 deals; 33 for the year) and I/DD–Autism remained steady (8 Q4 deals).
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