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Linden Capital Partners is exploring the sale of addiction treatment provider Pinnacle Treatment Centers, multiple sources tell Axios. 

Why it matters: Demand for better access to behavioral health services, including substance abuse treatment, continues to outpace supply.   

U.S. drug overdose deaths in 2021 were up 15% year over year, led by opioid and meth use, according to the CDC.  

Secular tailwinds have long fueled demand for behavioral health care, and the consequences of the pandemic, be it unemployment or loss of life, have only added to long-term distress — increasing that supply-demand imbalance. 

What’s happening: Lincoln International has been hired to manage the sale of Pinnacle, which is just kicking off, sources say. 

Mt. Laurel, New Jersey-based Pinnacle is projecting around $70 million to $75 million of 2022 EBITDA, sources say.  

Context: Pinnacle offers various programs including detoxification, residential, inpatient, partial hospital and outpatient treatment for those suffering from substance abuse addiction. It also offers medication-assisted treatment for opioid addiction.

Pinnacle treats more than 10,000 daily via its more than 115 locations in eight states.

That implies its footprint has grown almost four-fold under Linden's six-year hold — at the time of sale, Pinnacle was a 30-plus facility network in five states.

State of play: Private equity firms have built out a handful of behavioral health platforms dedicated to addiction treatment. 

Community Medical Services, an opioid treatment provider, was acquired by FFL Partners and Two Sigma Impact in December. 

Behavioral Health Group is an opioid treatment network that Vistria Group bought in 2018 at a valuation of $250 million-plus, Sarah wrote then.

BayMark Health Services is an opioid addiction treatment company that Webster Equity Partners put into a continuation fund last year.

Summit BHC is an acute psychiatric care and addiction treatment company that Patient Square Capital bought for a $1.3 billion enterprise value last year, producing a 4x return for sellers Lee Equity and FFL Partners, Sarah wrote. 

💭 Our thought bubble: Despite a spate of sponsor-driven activity, quality questions have made investing in the space more challenging in past years. 

However, as programs increasingly focus on quality metrics, evidence-based practices and payor transparency, we could see more capital flow into the sector—particularly against the backdrop of a continuing opioid crisis. 

Linden declined to comment and Lincoln did not immediately return a request for comment. 

Claire Rychlewski contributed to this report.

Scoop: Linden starts sale process for Pinnacle Treatment Centers

Lincoln International is advising on the sale of the addiction treatment provider.

Illustration of a man pushing a giant pill up a hill

Health tech deals

Linden Capital Partners is exploring the sale of addiction treatment provider Pinnacle Treatment Centers, multiple sources tell Axios. Why it matters: Demand for better access to behavioral health services, including substance abuse treatment, continues to outpace supply.

Scoop: Linden starts sale process for Pinnacle Treatment Centers

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