Goldman Sachs Alternatives announced that it has acquired autism therapy provider Center for Social Dynamics.
As part of the deal, the Center for Social Dynamics’ previous private equity backer, NMS Capital, also reinvested in the company, according to a news release. It’s not clear what proportion of the company’s equity is held by each firm. The terms of the deal were not disclosed.
“One of the things that stood out to us when we looked at [the Center for Social Dynamics] was that it was an omnichannel provider,” Jason Slocum, managing director of inclusive growth at Goldman Sachs Alternatives, told Autism Business News. “From a quality and outcomes perspective, it is really able to provide services to children and their families in the setting that is most convenient for them and in the setting where the child can get the number of hours that are needed to be the most compliant with their individualized clinical plan.”
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The Concord, California-based Center for Social Dynamics operates in California, Washington, Oregon, Hawaii and Colorado. It employs 1,500 providers who provide care to about 4,700 clients in virtual, school-based, home-based and center-based settings. It operates 20 locations, according to its website.
NMS Capital invested in CSD in 2019, recapitalizing the company and giving it “a substantial capital commitment” to support CSD’s growth. Since then, its growth journey has included several rounds of M&A. It announced its most recent acquisition — of South Sound Behavior Therapy (SSBT) — in December 2021. It has acquired a total of five firms since July 2020.
“We believe the resources and expertise at Goldman Sachs will enhance our capabilities as a company and accelerate our ability to grant access to care while continuing to improve client outcomes and family well-being,” Kelly Bozarth, CEO of Center for Social Dynamics, said in the release.
Goldman Sachs Alternatives is the global alternative investment arm of Goldman Sachs Asset Management. Goldman Sachs Alternatives puts capital behind a wide spectrum of investment settings, including private equity investments, growth equity, private credit, real estate and hedge funds. NMS Capital has invested over $1.5 billion since its inception in 2010 by investing in lower middle-market companies.
Professionals at Goldman Sachs Alternatives and NMS Capital were already familiar with each other before NMS Capital started its sale process, Slocum said, adding that the two entities had similar investment approaches. This allowed NMS to reinvest in the Center for Social Dynamics with fresh funds.
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Behavioral Health Business identified the Center for Social Dynamics as a company to watch for potential sale. It’s difficult to contextualize this deal in the wider scheme of autism therapy dealmaking. While there have been some major autism therapy platforms that have traded in 2024 — including Addison, Texas-based Behavioral Innovations and Caravel Autism Health — the improving M&A factors have not led to a wave of unleashed pent-up demand.
In November, King Of Prussia, Pennsylvania-based Helping Hands Family acquired Hazelton, Pennsylvania-based Mission Autism Clinics, deepening Helping Hands Family’s presence in Maryland and Pennsylvania.
Overall, the number of autism therapy deals has slumped after a high in 2021, after a ramp-up that accelerated in 2019. However, that slump has coincided with a wider downturn in private equity investing; private equity drives over 90% of all deals done in the space, Dexter Braff, founder and president of the health care M&A firm The Braff Group, said at BHB’s INVEST 2024 conference.
“After that first wave of investment in ABA pre-COVID, I think we’re now seeing the winners emerging from that are the ABA providers that have very high levels of clinical quality and have outcomes that payers are keeping a keen eye on,” Slocum told ABN.
Raymond James acted as exclusive financial advisor. McDermott Will and Emery and Latham & Watkins served as legal counsel for the Center for Social Dynamics and Goldman Sachs, respectively.
Goldman Sachs Alternatives is investing from the firm’s inclusive growth investing platform. This will allow the firm to take a different approach than typical private equity investing in the autism therapy space, Slocum said.
“We’re obviously focused on driving significant growth in the business — expanding access, expanding the number of families that we’re serving — but we’re doing so in a way that holds the company and ourselves to a very high standard for clinical quality,” Slocum told ABN.
Source: bhbusiness.com
