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Scoop: North Castle and Stonehenge-backed Turnbridge exploring a sale

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Jan 29, 2024
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Turnbridge, a behavioral health company backed by North Castle Partners and Stonehenge Capital, is exploring a sale, three sources familiar with the situation tell Axios.

Why it matters: It's a middle-market deal not likely to be hamstrung by financing markets.

Details: Raymond James was hired to lead the process, two sources say.

  • Turnbridge is marketing itself on about $15 million of EBITDA, all sources say.

How it works: New Haven, Connecticut-based Turnbridge is a residential and outpatient clinical therapy provider for adolescents with substance use disorder (SUD).

  • Alongside substance use treatment and residential services, Turnbridge provides family therapy, gender-specific care and eating disorder treatment, among other services.

Catch up quick: North Castle invested in Turnbridge in 2015 for an undisclosed price. Stonehenge made an investment in the company in 2020, for undisclosed terms.

Between the lines: Prospective buyers will be diving into Turnbridge's payer mix, which will determine valuation, one source says.

  • The residential behavioral market was initially structured as a private pay, out-of-network model that let providers name their price but didn't necessarily open the patient floodgate.
  • Over the years, insurance companies and Medicaid have entered the fray, offering a more stable income stream.

State of play: Turnbridge is a likely platform acquisition for a private equity firm, sources say. Active firms in the space include:

  • Webster Equity Partners, backer of Discovery Behavioral, BayMark Health and Oceans Healthcare.
  • Thurston Group, which backs acquisitive mental health player ARC Health.
  • Shore Capital, which owns SUD treatment provider BrightView.
  • Health Enterprise Partners, which has a long history of behavioral health investments and backs SUD treatment provider Aware Recovery and Proven Behavior.

North Castle, Stonehenge and Raymond James did not respond to a request for comment.

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