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Center for Autism and Related Disorders (CARD) Backed by Blackstone Goes Bankrupt

The ABA therapy space has seen a wave of institutional investor interest and consolidation over the past 8-10 years. Both small and large private equity investors, growth equity firms, and venture capital investors have poured hundreds of millions of dollars into the ABA therapy space.


Approximately 1 in 54 children are diagnosed with some form of autism according to CDC's latest estimates. All 50 U.S. states have adopted insurance mandates for autism spectrum disorder, with Wyoming and Tennessee becoming the last coverage states in late 2019. The mandate requires that insurance companies provide some type of coverage for individuals with an autism diagnosis.


Despite the need for services and continued access to care, the industry and its investors has faced headwinds. Inflation, labor challenges, rising compensation (particularly for BCBA's and RBT's), stagnant reimbursement rates, and rising interest rates (expensive debt) have all created significant challenges for the space.



Center for Autism and Related Disorders (CARD) was initially going to receive a $300 million growth capital investment from Summit Partners in December 2016. That transaction failed and the Company continued to search for an investor to accelerate growth. CARD was eventually acquired in May 2018 by Blackstone Capital Partners for a $600 million enterprise value. CARD grew to be one of the largest providers in the space with a significant footprint of over 220 locations across 24 states. The Company continued to acquire add-on acquisitions at frothy purchase price multiples, while struggling to grow organically to drive true shareholder value. After several rounds of debt financing, the Company recently filed for bankruptcy and is selling the remaining assets back to the initial Founder.


This is a challenging macroeconomic environment for operators given supply chain disruptions, rising costs, staffing / labor inefficiencies, and provider turnover. Our RiverStone Reporting team has extensive experience in helping ABA therapy companies evaluate large, messy raw data sets from CentralReach to identify potential cost-cutting initiatives, opportunities for organic growth, and being an operational thought partner. Reach out to our RiverStone team today if you could use enhanced bookkeeping, financial reporting, KPI metrics, and company presentations.


Contact: Eric@RiverStoneReporting.com


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