Behavioral Health: Addiction / SUD Treatment Valuation Multiples and M&A Trends 2025
- Will Hamilton
- 6 days ago
- 5 min read
Updated: 1 day ago
The addiction treatment industry is a vital and rapidly evolving segment of the behavioral healthcare market, focused on the diagnosis and treatment of substance use disorders (SUDs), including alcohol, opioids, stimulants, and other drugs. Services range from detoxification and inpatient rehabilitation to outpatient therapy and medication-assisted treatment (MAT).
Key Growth Drivers
Key growth drivers for the industry include the following:
Rising Prevalence of Substance Abuse and Opioid Crisis: The increasing rates of alcohol, opioid, and illicit drug use-especially the ongoing opioid crisis in North America-are fueling demand for treatment services.
Government Initiatives and Increased Funding: Governments worldwide are allocating more resources to support addiction treatment, awareness campaigns, and rehabilitation infrastructure, which is expanding access to care.
Advancements in Treatment Methods (Medication-Assisted Treatment and Digital Therapeutics): Innovations such as medication-assisted treatment (MAT), behavioral therapy, and digital health solutions (including telehealth and mobile apps) are improving treatment efficacy and accessibility.
Integration of Mental Health and Addiction Services: There is a growing trend toward integrating mental health care with addiction treatment, addressing co-occurring disorders and providing more comprehensive, effective care.
Increasing Public Awareness and Reduced Stigma: Public health campaigns, media outreach, and education are raising awareness about the dangers of substance abuse and reducing the stigma associated with seeking treatment, encouraging more individuals to access care.
Expanding Insurance Coverage and Reimbursement Policies: Broader insurance coverage, including Medicaid expansion and improved reimbursement policies for addiction treatment, is making services more affordable and accessible, particularly in North America.
Addiction / Substance Abuse Disorder M&A Deal Volume
The number of announced addiction treatment M&A deals has declined steadily since 2019, outside of a major spike of activity in 2021. This subdued activity reflects a broader trend across the behavioral health sector, influenced by macroeconomic headwinds, higher interest rates, and a more cautious investment environment. While the declines have been steady, they have not been particularly significant in terms of magnitude, and consolidation remains a defining trend. Despite the slowdown, private equity and strategic buyers remain active, particularly in seeking platform and add-on acquisitions to build scalable, integrated care models.
While the substance abuse disorder treatment industry remains fragmented with a large number of potential acquirers, the number of platforms that have made more than a handful of acquisitions over the past few years is fairly small. By far the largest acquirer in terms of announced deals since 2019 is Baymark, with 29.
New platforms are being created and / or changing hands at a steady rate, with seven announced platform deals in each of the past three years (2022-2024), according to our database.
Addiction Treatment EBITDA Multiples
Single Facilities or Small Portfolios (typically revenue under $10M):
These companies usually sell for lower multiples, ranging from 3x to 8x EBITDA. The lower end of the range is typically associated with smaller programs, a reliance on out-of-network payments, and a heavy reliance on the owner / operator, which can lead to business continuity concerns.
Large, Established Regional Chains (revenue over $10M):
Larger, more established companies with proven profitability, strong brand equity, in-network contracts, and a broader patient base may command higher multiples. These can range from 5x to 10x EBITDA, depending on size, payer characteristics, service mix, growth rate, and the stability of the cash flow.
Scaling Addiction Treatment Platforms:
Larger, growing companies with strong, continuing management teams can command multiples in the 10x to 15x EBITDAÂ range, especially if they have demonstrated the ability to grow quickly and efficiently. While publicly-disclosed financial information is sparse for this portion of the market, our database includes a handful of precedent deals, including several recent deals with reported EBITDA multiples in the 14x to 16x range.
Factors Impacting the EBITDA Multiple for Substance Abuse Disorder Providers
Acquisition multiples are a function of perceived risk and growth. Key considerations within the occupational medicine industry include the following:
Payer Mix and Reimbursement Structure:Â The mix of payers and the existence of contractual relationships are critical.
In-Network vs. Out-of-Network: In-network providers typically command higher multiples due to stable reimbursement rates and predictable cash flows, while out-of-network providers traditionally face lower multiples because of reimbursement volatility and uncertainty. However, hybrid models that include some OON revenue seem to be becoming more popular in the market.
Commercial vs. Government Payers: Centers with commercial insurance contracts typically receive higher multiples than Medicaid-dependent providers, which often struggle with lower reimbursement rates.
Service Diversification:Â Providers with an expanded care continuum offering mental health, eating disorder treatment, or sober living services attract premium valuations by addressing co-occurring conditions and broadening revenue streams. Hybrid models integrating telehealth and digital therapeutics also enhance multiples.
Operational Scale and Efficiency:Â Scalable platforms with multiple locations achieve cost efficiencies, stronger payer negotiation leverage, and higher EBITDA margins, driving multiples upward. Robust administrative systems (e.g., billing, compliance) reduce overhead and improve margins, critical for attracting private equity.
Regulatory Environment:Â Centers meeting state/federal standards (e.g., Joint Commission accreditation) mitigate regulatory risks and justify higher multiples. Non-compliance can erode valuations.
Clinical Outcomes and Reputation: Providers with low relapse rates and high patient satisfaction scores strengthen brand equity, enabling premium pricing.
Actively Listed SUD Providers for Sale
The following is a summary of a few actively listed addiction treatment opportunities from our active listings database:
(links will break over time)
Diversified Substance Abuse Facility in Ohio: Listed for sale at $8m, this company is marketed based on estimated revenue and adjusted EBITDA of $4.8m and $1.6m, respectively, implying multiples of 1.7x revenue and 5x EBITDA. According to the listing, services provided include substance abuse, mental health counseling and treatment, MAT, IOP/PHP, sober living, youth substance abuse and mental health, and substance abuse/mental health case management. The payer mix is 90% Medicaid and 10% commercial.
Addiction Treatment and Mental Health Provider in California: Listed for sale at $7m, this company is marketed based on estimated revenue and cash flow of $3.4m and $1.3m, respectively, implying multiples of 2x revenue and 5.4x cash flow. According to the listing, the business the facility offers partial hospitalization programs (PHP), intensive outpatient programs (IOP), and outpatient services with an established management team.
Residential Addiction Treatment Facility in California: Listed for sale at $1.7m, this company is marketed based on estimated revenue and cash flow of $966k and $442k, respectively, implying multiples of 1.8x revenue and 3.9x cash flow. According to the listing, the business supplies DME to hospitals, clinics, and through two retail locations, with 80% of revenue stemming from long-term relationships with over 40 healthcare facilities.
Multi-Location SUD Provider in Denver: Listed for sale at $1.25m, this company is marketed based on estimated revenue and cash flow of $3.1m and $355k, respectively, implying multiples of 0.4x revenue and 3.5x cash flow. According to the listing, it offers SUD treatment services on an outpatient basis, and future growth plans include leveraging telehealth and a unique program integrating with medication-assisted treatment (MAT).
Strategic Recommendations for Maximizing Valuation
Shift to In-Network Contracts: Negotiate with commercial payers to stabilize revenue.
Diversify Services: Add mental health or sober living programs to capture adjacent demand.
Optimize Margins: Invest in EHR systems and centralized billing to reduce overhead.
Leverage Data: Track patient outcomes and satisfaction to demonstrate efficacy to buyers.
About Scope Research
Scope Research compiles a variety of healthcare M&A databases and provides healthcare valuation services. The Scope Research Healthcare M&A Valuation Database currently has financial details for 126 behavioral health deals going back to 2010, 90 of which include reported EBITDA multiples. The data can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about our behavioral health valuation services or healthcare M&A databases.