Capstone Headwaters Reports: Behavioral Health Needs Projected to Increase Following Lockdowns, Pandemic Uncertainty

February 22, 2021

Boston, MA – Capstone Headwaters released its Behavioral Healthcare Services Industry Update today, reporting that the industry continued to attract strong buyer interest despite economic headwinds and the global impacts of COVID-19 lockdowns. The industry is expected to see strong growth in 2021, as COVID-19 has proved not only a physical health crisis, but a mental health crisis as well due to prolonged lockdowns, job losses, and social isolation.  

“It is estimated that nearly 20% of the U.S. adult population or 44 million people suffer from mental illness annually; however, 56% do not receive treatment.  Additionally, of the 20.2 million American adults that suffer from substance abuse disorders over half had a co-occurring mental illness and 47.5% experienced suicidal ideation.  Depression alone is more common than aids, cancer and diabetes combined.”  said Capstone Director Mark Surowiak, the lead contributor in the newly released report.

“Due to the COVID -19 pandemic, these conditions have only been exacerbated as individuals and families have suffered from even greater amounts of stress, anxiety, isolation.  As a result, mental and behavioral health communities have continued to see heightened demand and are anticipating a tsunami of need with long-term implications.” Surowiak added.

In addition to adults, youth and children have faced unique health challenges. Stay-in-place orders and remote learning environments have caused increased anxiety and depression.  The importance of focusing on the behavioral health needs of adolescents is further discussed in our interview with Dave Bornhoeft, Partner at Cognitive Capital Partners.

Merger and acquisition (M&A) activity moderately increased in 2020, with 111 transactions compared to 103 in 2019.  Notably, while other industries experienced a steep pandemic-driven drop-off in deal activity during Q2, the Behavioral Healthcare Services industry remained relatively stable.Deal activity saw a YOY increase of 32% in Q4 2020 from Q4 2019 and has remained strong into Q1 2021. The industry is abundant in acquisition opportunities and continues to heavily consolidate as small regional companies utilize M&A to stimulate inorganic growth.

To access the full report, click here


Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States.  The firm has a rich, 20-year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors.  Capstone offers a fully integrated suite of corporate finance services, including M&A, debt and equity placement, corporate restructuring, valuation, and fairness opinions, financial advisory, and ESOP advisory services.  Headquartered in Boston, the firm has 175+ professionals across 17 offices in the U.S., with an international presence including over 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise through large, cross-functional teams on a global basis.  For more information, visit

For More Information Contact the Key Report Contributors:

Mark Surowiak