Private Investments in the Autism Sector – Overview
•	The autism treatment services sector for people 21 and under is worth approximately $15 billion
–	It is rapidly growing due to accelerating demand, increased prevalence and diagnosis, and expanded insurance coverage
•	Significant market fragmentation and high valuations related to this growth attracted increased investment from private equity groups
•	Acquisitions of autism treatment providers have had an unprecedented surge:
–	Approximately 50 M&A deals in 2019
–	90% were completed by private equity firms
•	The autism sector is made up of hundreds, if not thousands, of rapidly growing providers
–	Many are small operations
•	The primary impediment to growth for many of these companies is professional management, so well run companies are at a premium
–	According to John Hennegan of Shore Capital Partners
Private Equity (PE) Investment
•	PE investment in autism services dates back to 2004 when Trimaran Capital Partners acquired Education Services of America
–	The market experienced a significant increase in activity over the past five years
•	PE involvement in the intellectual and developmental disabilities (I/DD) space spiked in 2015 – 
–	Eight PE firms sponsored over 30 deals in a single year – 
a 50% increase in sector deals than the previous high
•	Since the uptick, PE has been increasingly interested specifically in the autism space
•	Recent studies show the prevalence of Autism Spectrum Disorder (ASD) is high in the U.S. – 1 in 40 children are parent-reported with an ASD diagnosis
•	PE backing is allowing existing providers to: 
–	Expand their operations through partnerships and M&A with other provider organizations
–	Invest in technologies to improve clinical care and patient experience
–	Grow teams of trained clinicians to support the demand in services
Notable Recent PE Investments
•	Major PE firms are now entering what has been a relatively niche 
investment market
–	August 2019: Morgan Stanley Expansion Capital fund provided funding to Alternative Behavior Strategies, a leading provider of services for children with ASD
–	January 2019: TA Associates acquired Behavioral Health Works, an Anaheim, 
CA-based company that provides School and Community-Based services in 11 states
–	May 2018: The Halifax Group acquired Chancelight Behavioral Health and Education, a Nashville, TN-based company offering school- and community-based services and treatment, aiming to become a national provider by growing through both organic (clinic opening) and inorganic strategies
–	April 2018: Blackstone Group Inc. acquired Center for Autism and Related Disorders, one of the largest treatment groups in California
•	Firms have been investing on both sides of the industry:
Venture Investment Trend
Though 2019 saw a regression from the spike in 2018 led by a $68 million Series C round raised by Akili Interactive, 2019 surpassed any other year in terms of Venture investment in ASD treatment companies
What’s Next?
•	Other Avenues to Invest
–	One theme, noted by some investors, is a focus on identifying ancillary services within autism, outside the traditional delivery of therapy, such services include:
–	electronic records technologies, revenue cycle management, training and enterprise software all tailored to the unique needs of the space
–	Applied Behavior Analysis (ABA) therapy may have attributes that do not resonate with some investors, but experts believe even these more hesitant investors could increase investment in the ecosystem that supports the industry
•	Data Gaining More Importance 
–	As commercial payors in the industry become more sophisticated purchasers of ABA services, tracking service-level data and outcomes is increasingly important
–	Investors are gravitating to providers that have the data tracking capabilities to demonstrate clinical value to payors
•	What About the Adult Population?
–	So far, nearly all the investing activity has focused on early intervention and services for children
–	Many experts raised the question about the unmet need for adults on the autism spectrum 
–	Some have suggested that we will see a new wave of M&A activity involving service providers who cater to adults with alternative care models

Goodwin at a Glance
AmLaw Global ranked
33

Global Offices
13

Lawyers
1200+

Uniquely  collaborative “one”  firm culture

Highly regarded
securities,
white collar and
IP litigation teams

5 Top Ranked
Transactional Practices
Real Estate Industry
Life  Sciences

Financial  Institutions

Tech

Private
Equity