Private equity-backed healthcare provider BrightSpring is spinning off its behavioral health business, which includes care for people with intellectual and developmental disabilities (IDD). Sevita, another home and community care provider, paid $835 million to acquire the service arm.
Louisville, Kentucky-based BrightSpring announced the deal Monday, saying the sale of its behavioral services arm, ResCare Community Living, allows the company to focus on its core markets and improve revenue and EBITDA performance.
“At Sevita, we are pleased to partner with a new owner with extensive experience in the I/DD industry who is well-suited to continue providing compassionate care to our community-dwelling client population,” Jon Rousseau, chairman, president and CEO. of BrightSpring, said in a statement. “With enhanced combined processes, technology and overall capabilities, there are opportunities to share proven and innovative approaches that should advance opportunities for all ingredients in this market. I believe both organizations will benefit significantly from the strengthened focus on key markets.”
BrightSpring provides care for a variety of physical and behavioral health conditions. Its behavioral health offerings include applied behavior analysis (ABA), mental health services, community living and a behavioral health pharmacy. Private equity firm KKR acquired BrightSpring for $1.32 billion in 2019.
The newly spun-off business ResCare Community Living has been in business for more than 40 years and provides more than 100 million hours of care to people with IDD in 2,000 residential homes, according to its website. In 2024, the business is expected to generate approximately $1.2 billion in revenue and $128 million in adjusted EBITDA. It includes 14,000 patients who receive services from 13,500 employees.
After taxes, BrightSpring anticipates a gain of about $715 million from the ResCare Community Living sale and plans to use the funds to pay down its debts.
Edina, Minnesota-based Sevita, formerly MENTOR Network, provides home and community care for adults and children with IDD, autism, complex care needs and other conditions. It also serves children in the foster care system. Sevita employs around 45,000 people.
“Sevita and ResCare Community Living share a deep commitment to providing quality community-based health care and improving the lives of those who rely on us every day,” said Philip Kaufman, CEO of Sevita. “We look forward to welcoming the talented and experienced ResCare Community Living team to Sevita.”
The deal will simplify BrightSpring’s offerings, increase operational efficiencies, refine the payer mix and improve clinical integration and business synergies, according to the company. It will also “maximize exposure” to its target markets: home health, rehabilitation, primary care, hospice and specialty, home and community pharmacy.
The deal marks the second time this month that a behavioral health provider has divested a significant portion of its behavioral services to focus on its core business. Amwell (NYSE: AMWL ) sold its virtual psychiatric business to clinic-to-clinic telehealth provider Avel eCare for $21 million, citing the need to improve services and pursue key growth channels.
Several other deals have hit the behavioral health space so far in 2025. Oceans Healthcare acquired Haven Behavioral Healthcare and Iris Telehealth acquired innovaTel, a division of Quartet Health, within the past few weeks.
