Summit BHC announces deal with new investors

Summit Behavioral Healthcare (Summit BHC) has been aggressive in its growth in recent years, expanding its portfolio from three addiction treatment facilities to 13 since 2015. Now, the company will have new investors providing financial backing as it aims to move toward a new phase of development.

Summit BHC on Wednesday announced it had entered into an agreement with healthcare investment firms Lee Equity Partners and FFL Partners to acquire a controlling interest in Summit from Flexpoint Ford and certain other investors. Financial terms of the deal, which is expected to close in the fourth quarter of 2017, were not disclosed.

Karen Prince, Summit BHC president and chief marketing officer, tells Behavioral Healthcare Executive that the move will not impact day-to-day operations and that the management team that founded the company in 2013 will remain intact.

“Their investment is primarily focused on supporting our continued growth,” Prince says. “We have grown the company to 13 facilities in 10 states in about 3½ years. It’s a highly fragmented industry. There are still a lot of development opportunities available to us. Through partnering with [Lee Equity and FFL], they very much see the world through the same set of eyes we do. It’s going to allow us to continue to execute on our strategic growth initiative.”

Summit BHC, headquartered in Franklin, Tenn., provides specialty chemical dependency and addiction disorder services, with residential, detox, partial hospital and intensive outpatient programs. Lee Equity and FFL Partners are private equity firms based in New York and San Francisco, respectively.

“We’ve had a great working relationship with Flexpoint Ford since our partnership began in 2015,” Prince says. “We collectively saw a lot more opportunities from a growth perspective and felt like it was a natural point for us to look at bringing in some additional financial sponsors to help support us in that next round of growth. We had a great partnership. The outcome is very positive.”

In a news release announcing the deal, Summit BHC notes Golub Capital Markets LLC and Intermediate Capital Group are providing financing for the transaction and that Willkie Farr Gallagher LLP is acting as legal counsel to Lee Equity and FFL, while Moelis & Co. is the financial advisor for Summit.