Behavioral health businesses, and in particular, ABA providers, that could clearly demonstrate embedded growth opportunities have achieved attractive valuations. These valuations were supported by pro forma earnings reflective of growth leveraging recent investments in infrastructure and resources. Sellers must be able to present credible pro forma financial analyses that convey new baseline and growth opportunities to Buyers. Furthermore, sellers should present support for their ability to execute on those opportunities and their track record of progress towards achieving their pro forma financials.

In this brief, we walk through key pro forma analyses that behavioral health companies should consider before engaging potential Buyers in a transaction process. While Buyers may not necessarily attribute full credit to all pro forma adjustments, and valuation will be influenced by manifold factors, these adjustments serve to highlight the magnitude of the opportunity achievable for Buyers and provides support for them to be more aggressive in ascribing value to the business.

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