Private investment firm Linden said Tuesday it has entered the growing behavioral healthcare market with a $40 million investment in Behavioral Centers of America, Nashville.
Funding for this transaction will be used to acquire BCAs current facilities, expand some of those in the future and build new ones, said Tony Davis, managing partner at Linden, a Chicago-based company that uses financial and operating partners to focus on middle-market leveraged buyout investments in healthcare and life sciences. Formed in 2002, BCA owns and operates both inpatient and outpatient facilities at six locations in Ohio and Texas and focuses primarily on adolescent and geriatric populations.
According to Davis, Linden is excited to back the management team at BCA, which is led by Edward Stack, its chief executive officer. Previously, Stack founded Behavioral Healthcare Corp. after acquiring six hospitals from Hospital Corporation of America. Eventually, BHC grew to 48 hospitals in 22 states and Puerto Rico before it was sold as Ardent Health Services to Psychiatric Solutions in 2005. In addition, Linden sees a great need for facilities in this segment.
The growing awareness, the growing ability to diagnose, the decreasing stigmathe need has always been there, but there is increasing demand, said Andy Kuhn, vice president at Linden, who added that combining this demand with constrained supply creates a favorable space. -- by Jessica Zigmond