Morning all! Irien Joseph here with Friday’s Europe Wire, coming to you from the London newsroom.
We lead today with mental and behavioral health, a sector described by Cooper Parry’s Andy Parker as having “long-term” growth rates. Government-led awareness programs, wider adoption of telemedicine and the expansion of digital health tools are all supporting that growth and private equity is leaning in. PE Hub’s Sophie Rose has compiled a listicle highlighting six deals in the sector in the last four months.
Next, we dive into what’s getting deals done right now, and what’s hindering them. We have comments from Aon’s Andrea Foti on why mid-market M&A is clearing first while large-cap deals stall, how execution discipline is reshaping seller leverage and why secondaries and insurance-backed structures are becoming go-to liquidity tools.
Before that, a quick reminder: Deals of the Year nominations close today – this is your final chance to submit.
Last call
Today is the final day to submit nominations for PE Hub’s Deal of the Year Awards, which honor exceptional buyouts that were fully or mostly realized in 2025.
Winners will be selected in six categories, plus an overall winner, and the results will be published on pehub.com in March. Any questions can be directed to PE Hub editor-in-chief Mary Kathleen (MK) Flynn at mk.flynn@pei.group
Mental wellbeing
From therapy to educational resources to pharmacies, the mental and behavioral health sector is broad and developing, PE Hub’s Sophie Rose writes. Private equity has picked up on the momentum, with several firms making investments in the segment.
Post-covid, the focus on the mental health of young people, students, workers and older people has come under much more scrutiny, Andy Parker, corporate finance partner at accounting firm Cooper Parry, told PE Hub.
“I see a continuing dealflow in the sector,” Parker said. “The tightly defined mental health services overlaps with many other areas of investment for private equity, for example occupational health, education services and physical health services.”
Jim Weight, managing partner of Weight Partners Capital, told PE Hub that healthcare overall is an attractive sector for investment, but “the mental health subsector has even greater long-term growth rates.”
Greater incidence and improved diagnosis of mental health conditions drive this momentum, according to Weight. Increases in reimbursement from public and insurance payors, as well as a greater willingness by private individuals to fund treatment where public funding is unavailable also boost the attractiveness of the segment.
For more mainstream investors, pockets of appetite include care delivery technology providers, as well as employer-funded mental health businesses that support staff wellbeing and avoid direct exposure to government funding or regulation, Weight said.
“We expect to see continued strong activity in these asset-lite segments by mainstream investors on top of activity in more complex parts of government-reimbursed mental healthcare by specialist healthcare investors over 2026,” he added.
In May, PE Hub reported seven deals in the mental and behavioral health sector. KKR, Clearview Capital and Northlane Capital Partners were among firms making moves in the segment.
Below is the most recent of six deals in the last four months:
In January, Sheridan Capital Partners announced the acquisition of ICANotes, a provider of electronic healthcare record software for the behavioral healthcare market, PE Hub exclusively revealed. The sellers were the ICANotes founders, brothers Richard and Don Morganstern.
Based in Baltimore, ICANotes develops cloud-based software that supports clinical workflows for psychiatrists, therapists, counselors, social workers and nurse practitioners primarily within the psychotherapy (talk therapy) segment of the market.
Behavioral healthcare professionals also use it in the treatment of substance-use disorder and post-traumatic stress disorder, and in couples counseling, group therapy and rehabilitation programs.
Read the full story to find out the other five deals and the PE firms and target companies involved in those transactions.
Aggressive playbooks
Let’s look at insights into mid-market and large-cap M&A trends.
Mid-market M&A is clearing first because the processes tend to involve auctions with realistic price indications, potential buyers, due diligence, early access to management and realistic timetables, Andrea Foti, managing director and CCO EMEA at Aon M&A and Transaction Solutions, told me. “In terms of contractual terms, we are seeing locked box or tight completion mechanics, flexibility in supporting the buyer in structuring the financing, and greater discipline regarding conditions precedent.”
In the large-cap market, particularly in the US, the dynamic has been different. The boom in these transactions is “leading some sellers to run aggressive playbooks: broad buyer lists, stretched guidance, heavy conditionality and aggressive interim operating covenants,” Foti said.
That divergence is unlikely to be permanent. Foti expects normalization in 2026 to “likely to come from large-cap – particularly PE-owned assets – converging toward these mid-market style, execution led structures.”
A similar shift is playing out in liquidity options, with alternative liquidity becoming the default. “Sponsors see GP-led secondaries, continuation funds and insurance backed solutions as core portfolio tools,” he said.
GP-led transactions have become more institutional over the last 12-18 months, he said. There’s a “focus on valuation of assets, better syndication of the secondary capital stack and earlier use of W&I [warranty and indemnity], tax and NAV insurance to de-risk execution and distribute capital.”
The growing centrality of secondaries is reflected in EQT’s agreement to acquire Coller Capital, a global secondaries firm, yesterday. “Secondaries have become an increasingly important tool for clients in managing liquidity and portfolio construction, and in supporting long-term ownership of high-quality assets,” said Per Franzén, CEO and managing partner of EQT, in a statement. “Together, I believe we can double the size of Coller’s business in less than four years. As a combined firm, we will be exceptionally well positioned to deliver integrated solutions across both primary and secondary markets, underpinned by a disciplined focus on performance.”
EQT is not alone. Hg also formed a new team to invest in GP-led secondaries transactions within its core software and technology-enabled services sectors in mid-January.
Check out this article to find out why more GPs are embracing single-asset continuation vehicles. For more on why Pantheon’s Amyn Hassanally thinks GP-led single-asset CVs are used for ‘high-quality trophy assets,’ read this Q&A.
Still, there are limits to how far this shift can go. Foti said: “the remaining challenges are around alignment of interests and the complexity of the deals, with the investment committees of PE funds scrutinizing the transaction structure, governance and asset selection.”
Transaction complexity – multi-asset vehicles, structure and availability of financing and utilization of insurance services – can add “significant” pressure to timelines and internal resources, he said.
At the same time, seller leverage is being reshaped by capital overhang, founder re-entries and mounting sponsor pressure to exit, with implications for pricing, structure and timelines in competitive sponsor-led processes.
In PE-led auctions, leverage shows up in detailed preparation and high credibility, not just competitive tension, Foti said. “Well-prepared PE sellers are using deep vendor DDs, detailed business plans and focused buyer lists to drive tight processes where sponsors can underwrite, secure financing and obtain insurance within disciplined valuation ranges.”
Managing the timetable – with the necessary level of flexibility – is also a key tool, he added.
On the exit front, we have a fresh deal to report: YFM Equity Partners has exited its investment in Vuealta to Keyrus.
London-based Vuealta is a specialist provider of connected business planning and digital transformation tools.
That’s it from me. John R Fischer will bring you the US edition of the Wire and Nina Lindholm will be back on Monday with the Europe edition.
Warmly,
Irien
