Key Takeaways
- Deal volume stabilizes around 10 transactions per quarter: Pediatric therapy M&A has held to roughly 10 deals per quarter since 2022, with 11 deals closed through April 2026 and 9 in Q1 alone.
PE-backed platforms reclaim the buyer pool: Seven of 11 deals were add-on acquisitions by existing PE-backed platforms, reversing a recent stretch in which strategic buyers had taken proportionally more share. - Multi-disciplinary therapy models dominate: Only one of the 11 deals was ABA-only; the remaining 10 combined ABA with OT, PT, and ST. Two transactions also folded in pediatric counseling, an early signal of behavioral health convergence.
- Tech-enabled capital flows through private placements, not M&A: Coral Care, AnswersNow, and Avela Health raised growth capital through private placements rather than M&A, and Lopez expects those companies to exit to larger tech-enabled platforms or strategics.
- Exit-readiness comes down to the basics: Lopez says financial stability, robust information systems, clean compliance, growth potential, clinician retention, strong clinical outcomes, and a diversified payer mix are the structural changes most likely to move multiples for owners two to three years out.
The pediatric therapy market entered 2026 against a backdrop of margin compression, Medicaid scrutiny, and persistently high interest rates. The deal volume, by Mergium Advisors’ count, has barely moved.
Eleven transactions closed in the first four months of the year, with nine of those landing in Q1, according to a market update Mergium president Luis F. Lopez published in early May. That run-rate is consistent with the quarterly average the firm has tracked since 2022, when the post-pandemic boom in ABA roll-ups began to cool. In an interview with Acuity, Lopez said the number that would actually concern him is a sharp drop, not a flat line.
“The trend that will concern me is a sharp decrease in quarterly number of transactions,” Lopez said. “The last few quarters have been very challenging, especially on one side you see the margin compression that is very real, and on the other hand economic conditions, specifically high interest rates, that are very important for private equity transactions. But even though we’ve had a challenging situation the last three years, you see activity.”
Lopez attributes the durability to two structural realities: an underserved patient population and a still-fragmented provider base. With somewhere on the order of 90 PE-backed platforms operating in the space, by his count, there is significant capital deployed and significant pressure to put more to work. Many small private practices, meanwhile, are struggling financially and increasingly likely to be acquired or to exit the market entirely.
PE-Backed Platforms Drive Pediatric Therapy M&A as ACES Sets the Tone
The most striking shift in Q1 was the resurgence of private-equity-backed platforms as the dominant buyer type. Seven of the 11 deals through April were add-on acquisitions by existing PE-backed platforms, accounting for 64 percent of volume, per Mergium’s tracking. Two were new PE platform investments and two were strategic buyers (a non-profit and a school-based provider).
Lopez said the pattern reverses what his firm had been observing for much of the last three years, when strategic buyers had been gaining share against platform add-ons. “What we had seen in the last three years or so was an increase in transactions by strategics instead of platforms,” he said. “In these four months we see again platform companies coming back into the mix.” That trend has continued into Q2, including LEARN Behavioral’s planned acquisition of Little Leaves from FullBloom, another PE-backed ABA tuck-in deal.
The headline transaction for Q1 was ACES’ acquisition of Phoenix-based Ally Pediatric Therapy from SBJ Capital, announced January 15. ACES, sponsored by General Atlantic since 2020, said in its release it would integrate Ally into its existing center network and transition Ally’s in-house speech, occupational, and feeding services to external care coordination over the coming months, leaving an ABA-only operation. Ally was the largest target in Mergium’s dataset by location count, with nine clinics across Greater Phoenix.
The Ally deal contrasts with other transactions in 2026 where buyers acquired multi-disciplinary platforms. Lopez said it reflects the reality that buyer theses vary significantly across PE firms, and that the same target can attract different buyers for different reasons.
“There are different theses in the market and we see both,” he said. “We see private equity firms that are only interested in ABA. This is the case of the Ally transaction where they acquired ABA plus OT and ST, and they are going to move OT and ST outside the practice and continue only with the ABA. Recently we spoke to a private equity firm that is interested in ABA and also in OT, PT, ST. So you find everything in the market.”
Whether the single ABA-only deal in Q1 reflects a durable shift away from single-service platforms or simply timing is harder to read. Lopez said it is too early to call a trend and that Mergium will be watching the next quarters closely.
Multi-Disciplinary Pediatric Therapy Models Lead Deal Flow as Mental Health Quietly Enters the Mix
Of the 11 deals through April, 10 involved multi-disciplinary providers offering some mix of ABA, occupational therapy, physical therapy, and speech therapy. The clinical and economic logic of that bundle is well established by now: cross-referrals, reduced reimbursement-concentration risk, and better alignment with how families actually use developmental services.
Less established, and more interesting to Lopez, is the appearance of pediatric counseling inside two of the 11 deals. Lopez characterized the counseling component as ancillary rather than core, but said the cluster caught his attention.
“This is something we will need to drill down on,” he said. “These have shown up in some transactions in the past, but it caught our attention that of the 11, now two are in this realm as well. I think it’s more like an ancillary or complementary service in the industry. But certainly if those are coming in, it’s because there is demand for it.”
Asked whether the convergence between pediatric therapy and mental health is being driven by clinical logic, payor pressure, or buyer appetite for diversified revenue, Lopez said his read is that the demand is coming from the client side rather than from buyers seeking diversification. He acknowledged the underlying driver of that demand surge is something Mergium is still working to understand.
Care delivery, meanwhile, continues to broaden. Targets in the dataset spanned clinic-based providers, in-home models, and school-based providers. That breadth is one reason Lopez pushed back on framing the M&A market as primarily a brick-and-mortar story.
“When you say brick and mortar, that’s locations, but there is also a good mix of community models, meaning in-school and in-home,” he said.
What is largely absent from the M&A column is the virtual-first model. Three pediatric-therapy-adjacent companies announced significant capital raises in the same window: Coral Care closed a $13 million Series A for its in-home therapy marketplace; AnswersNow raised $40 million in Series B funding for its virtual BCBA-led ABA platform; and Avela Health, a virtual autism diagnostics provider, raised approximately $7 million in disclosed proceeds. Lopez noted in his LinkedIn post that not all of those transactions show up cleanly in U.S. Securities and Exchange Commission filings, in part because of SPVs and holding-company structures, a methodological caveat that argues for skepticism about deal counts drawn solely from public sources.
Those raises went to private placements, not M&A. Lopez expects the eventual exits to follow a different path than the platform add-on cycle that defines pediatric therapy today.
“We see in other segments of behavioral health, like mental health, that all those platforms backed by venture capital go and are sold to larger tech-enabled platforms or to strategic investors,” Lopez said. “So we should expect that also in autism or pediatric therapy, those tech-enabled companies eventually will be acquired by larger platforms, either tech-enabled or by larger strategics.”
Pediatric Therapy Practice Owners Eyeing an Exit: What Drives Valuation in 2026
For practice owners reading the market and weighing an exit in 2027 or 2028, Lopez’s advice came back to fundamentals. The companies that command premium multiples in the current environment are those that look stable or growing on revenue and/or margins and that have built infrastructure capable of surviving institutional due diligence. Other key elements are clean compliance, growth potential, clinician retention, strong clinical outcomes, and diversified payor mix.
“First of all, the company needs to be either stable or growing,” Lopez said. “Those companies that are struggling are tough to sell, certainly, because they are not attractive. We don’t see many buyers looking for restructuring pediatric therapy practices at this phase, and that’s something that is kind of interesting as well.”
The second key element is information infrastructure. Lopez said practices that lack the systems to produce reliable KPIs and to support an organized due diligence process consistently struggle in market, both because buyers cannot get comfortable and because advisors cannot tell the company’s story effectively.
Payer mix follows close behind. Lopez said practices that are 100 percent Medicaid trade at a discount to those carrying a more diversified base of commercial, TRICARE, and Medicaid revenue, particularly given the policy backdrop. Federal Medicaid spending is projected to be cut by more than $900 billion over the next decade under H.R. 1, according to the Congressional Budget Office, and a series of OIG audits has flagged hundreds of millions of dollars in improper ABA payments across Indiana, Wisconsin, Maine, and most recently Colorado, where federal auditors identified $285.2 million in improper or potentially improper payments. State-level rate cuts and accreditation requirements have stacked on top.
Lopez said those headlines unsettle the wrong audience. Experienced operators and PE firms that already run platforms in ABA, IDD, or mental health have priced the regulatory risk in and know how to navigate it. The buyers who get spooked are the ones trying to enter the sector for the first time.
“Most of the buyers in this industry are either very knowledgeable about the industry, and those are private equity that have already been in the industry, or already have platforms and experienced strategic buyers,” he said. “So that type of thing, they know how to address. They know how to do diligence and they know how to integrate when they acquire. The challenge is more for entrants that are not familiar with the industry.”
The next 18 to 24 months, in Lopez’s view, will be the period in which the policy backdrop, the wage environment, and any further moves on Medicaid sort themselves out. He expects deal volume to remain in roughly the same range it has held since 2022 and the consolidation of small, financially fragile practices to continue. The signal he is watching for, the one that would change his view, is a sharp quarterly decline. He has not seen one yet.
Frequently Asked Questions
How many pediatric therapy M&A deals closed in early 2026?
Mergium Advisors tracked 11 transactions through April 2026, with nine in Q1 and two in April. That cadence is in line with the roughly 10-deals-per-quarter pace the segment has held since 2022.
Why are private-equity-backed platforms dominating pediatric therapy M&A?
Existing PE-backed platforms accounted for seven of the 11 deals through April, all of them add-ons. With an estimated 90 PE-backed platforms operating in the space and significant capital still to deploy, consolidation continues to be driven by buyers already inside the sector rather than by new entrants.
Are buyers still interested in ABA-only practices?
Yes, but selectively. Only one of the 11 deals through April was ABA-only, and ACES has signaled it will divest the OT, ST, and feeding services it acquired with Ally Pediatric Therapy to focus exclusively on ABA. Lopez says some PE firms are explicitly looking only for ABA, while others want multi-disciplinary platforms or even therapy-only practices without ABA. Buyer thesis varies more than the headline numbers suggest.
How are virtual autism therapy companies raising capital in 2026?
Largely through private placements rather than M&A. Coral Care raised $13 million in Series A funding, AnswersNow raised $40 million in Series B, and Avela Health raised approximately $7 million in disclosed proceeds in the same window. Lopez expects exits in this category to flow toward larger tech-enabled platforms or strategic acquirers.
Do Medicaid audits and rate cuts deter pediatric therapy buyers?
Not for experienced operators and PE firms already running platforms in ABA, IDD, or mental health, according to Lopez. Those buyers have priced regulatory risk into their underwriting and have the operational infrastructure to navigate audits, prior authorization changes, and rate adjustments. New market entrants are more likely to walk away.
What should a pediatric therapy owner planning an exit in 2027 or 2028 focus on now?
Lopez points to three structural priorities: stable or growing financials, information systems that produce reliable KPIs and support an institutional-quality due diligence process, and a diversified payer mix beyond a single Medicaid concentration. Owners can also benchmark themselves against current EBITDA-multiple expectations for ABA and pediatric therapy practices before going to market.
