Kelso & Co. has clinched a deal to acquire Lindsay Goldberg’s Refresh Mental Health, three sources told PE Hub.
The deal, which was signed in mid-November, values the Jacksonville Beach, Florida, business around $700 million, some of the people said.
Kelso’s pending acquisition concludes a sale process that kicked off earlier this year. Lindsay Goldberg enlisted Jefferies for sell-side financial advice, PE Hub initially wrote in June.
Refresh, an operator of mental health treatment centers, was projecting approximately $40 million in 2020 EBITDA, some of the sources said at that time.
With clinics across more than 20 states and over 150 locations, Refresh provides outpatient mental health, substance abuse & eating-disorder services, with a focus on in-network operations.
The company is led by CEO Steve Gold, who previously led Crestview Capital Partners, a healthcare roll-up micro fund that owned and operated several outpatient mental health centers.
According to Crunchbase, Lindsay Goldberg acquired Crestview in 2017, the year of Refresh’s founding.
For New York’s Kelso, Refresh will join existing healthcare portfolio investments including Elara Caring, a home healthcare services business, Physicians Endoscopy, an operator of gastroenterology-focused ambulatory surgery centers, and its latest new platform investment, Foundation Consumer Brands. The firm in October invested in Foundation, which encompasses seven OTC [over the counter] brands that are in the nasal strip, pediatric cough & cold, and oral analgesic categories.
Kelso’s entrance into behavioral health comes after TPG’s $1.2 billion bet this summer for another industry player, LifeStance Health.
Broadly, the disruption to the healthcare industry in the wake of the pandemic has shown a light on the demand for behavioral health, which is viewed as a particularly applicable area of telehealth in the remote environment.
Adding to existing industry tailwinds, unemployment and loss of life stemming from the crisis is expected to create long-term distress, boosting demand for providers of mental health services.
In other brewing sell-side activity for Lindsay Goldberg, the firm is nearing the sale of Women’s Care Enterprises, which PE Hub initially wrote in September was kicking off a sale process.
Lindsay Goldberg and Jefferies declined to comment. Kelso didn’t return PE Hub‘s requests for comment and the company could not immediately be reached.