The Case for De Novo: Economics, Culture, and Control

ACROSS THE UNITED STATES — The arithmetic of ABA growth has shifted. During the peak acquisition years of 2019 through 2021, private equity firms paid multiples that routinely exceeded 10x EBITDA for platform-quality ABA targets. The logic was straightforward: acquire an operating practice with established payer contracts, credentialed staff, and a patient census, then layer it into a growing platform. Speed was the priority. Capital was cheap. The competition for targets was intense.

By 2026, every variable in that equation has changed. Interest rates rose steeply between 2022 and 2024, increasing the cost of leveraged acquisitions. Seller expectations, anchored to 2021-era pricing, took years to adjust. Medicaid reimbursement cuts in Nebraska, Colorado, and North Carolina have introduced cash flow uncertainty that buyers must model into forward projections. And the ABA industry’s fraud and compliance landscape—with high-profile enforcement actions and OIG audits—has made due diligence more expensive and more likely to surface issues that kill deals.

In this environment, a growing number of ABA platforms are rediscovering the economics of de novo expansion. Dan Davidson, managing director at Brentwood Capital Advisors, put it directly at Behavioral Health Business’s INVEST conference: acquisitions are the fastest way to grow, but the most economical, the most return on investment is definitely de novo. Tani Weiner, co-chair of the Behavioral Health Group at the law firm Polsinelli, described de novo as a steady channel of growth that has become particularly important during the slower M&A period of 2023 and 2024.

The financial logic is clear. A de novo clinic opening requires lease negotiation, buildout, equipment, staff recruitment, and a ramp period before reaching profitability. The total capital investment for a single ABA clinic is typically a fraction of the acquisition cost of an equivalent practice. There is no goodwill premium, no earnout negotiation, and no integration risk from acquiring another organization’s culture, systems, and compliance history. The platform retains full control over clinical protocols, technology implementation, hiring standards, and brand identity from day one.

Acquisitions are the fastest way to grow, but the most economical, the most return on investment is definitely de novo. The math has shifted, and platforms that can build new clinics from scratch are increasingly choosing to do so.

The Case for Acquisition: Speed, Revenue, and Market Entry

De novo expansion has clear economic advantages, but it is not without limitations—and for many growth strategies, acquisitions remain essential. The most obvious advantage of an acquisition is speed to revenue. A de novo clinic starts at zero patients and must build its census over months. An acquisition delivers an established patient base, active payer contracts, and credentialed clinical staff on day one. For a PE-backed platform operating on a three-to-five-year hold timeline, the time value of immediate revenue can outweigh the economic advantages of building from scratch.

Market entry is another factor. A platform seeking to expand into a new state faces not only the operational challenge of opening a clinic but the regulatory challenge of obtaining state-specific licensure, credentialing with local payers, building referral relationships with pediatricians and developmental specialists, and establishing brand awareness in a market where the platform has no existing presence. Acquiring a local provider with established payer contracts and referral networks eliminates months or years of market development time.

Staff acquisition may be the most important variable. ABA’s labor market is structurally constrained. The supply of BCBAs is growing but remains insufficient to meet demand in many regions. Recruiting and retaining experienced BCBAs for a de novo operation in a market where the platform has no reputation is significantly harder than acquiring a practice where the clinical team is already in place. A de novo clinic that cannot recruit a supervising BCBA cannot open. A de novo clinic that recruits a BCBA but cannot retain RBTs cannot maintain its patient census.

The result is that most sophisticated ABA platforms do not choose between de novo and acquisition. They employ both strategies simultaneously, using acquisitions for rapid market entry and platform-scale growth, and de novo openings for infill expansion in markets where they already have presence, payer relationships, and brand recognition.

The Hybrid Model: How Leading Platforms Are Doing Both

Several of the most active ABA platforms in 2025 and 2026 illustrate the hybrid approach in practice.

ACES (General Atlantic). In January 2026, ACES acquired Ally Pediatric Therapy, a Phoenix-based provider, from SBJ Capital. The acquisition brought nine additional locations into ACES’s network, expanding its Arizona footprint and its total clinic count to 92 across seven states. But ACES did not stop at the acquisition. The company simultaneously announced plans to add additional de novo centers in the Phoenix market—using the acquired Ally platform as a beachhead for organic growth. This combine-then-expand model allows ACES to enter a market through acquisition and then deepen its presence through de novo openings that leverage the acquired team’s local knowledge, payer relationships, and brand awareness.

JoyBridge Kids (Frontline Healthcare Partners). The Mount Juliet, Tennessee–based provider exemplifies a growth strategy that balances acquisitions with deliberate de novo expansion and internal talent development. JoyBridge acquired Pediatric Advanced Therapy in November 2025, adding 10 clinics in North Carolina and bringing its total to approximately 24 sites across Tennessee, Georgia, and North Carolina. But JoyBridge’s growth has also been significantly driven by de novo clinic openings in Nashville, Savannah, and Raleigh. The company’s program to homegrow BCBAs—with 40 graduate students in master’s-level programs, paid indirect hours, supervision, mentorship, and tuition assistance—directly supports its de novo strategy by building the clinical talent pipeline needed to staff new locations.

Behavioral Innovations (Tenex Capital Management). When Shore Capital Partners sold Behavioral Innovations to Tenex in June 2024, the platform operated 77 centers across Texas, Oklahoma, and Colorado. That growth—from 13 centers at the time of Shore’s 2017 investment to 77 at exit—was overwhelmingly driven by de novo clinic openings. Under CEO Dino Eliopoulos, BI opened 64 new clinics, creating more than 2,300 jobs. The Behavioral Innovations story demonstrates that de novo can be the dominant growth channel even within a PE-backed platform, provided the organization has the operational capability to replicate its model across geographies.

Behavioral Innovations grew from 13 centers to 77 primarily through de novo openings—creating 2,300 jobs in the process. The model proves that organic expansion, not just acquisitions, can be the primary growth engine for a PE-backed ABA platform.

The Data-Driven De Novo Decision

The sophistication of de novo site selection has increased dramatically. Historically, ABA providers opened new clinics based on informal signals—where families were asking for services, where clinicians lived, where a landlord offered favorable lease terms. That approach does not scale reliably. A de novo failure—a clinic that never reaches profitability—represents not just wasted capital but wasted time, which for a PE-backed platform on a hold clock is often more costly than the financial loss.

Modern de novo planning draws on multiple data sources. Demand analysis uses autism prevalence data, referral patterns from pediatricians and developmental specialists, and waitlist information from existing providers to identify markets with unmet need. Supply analysis maps the existing provider landscape, including the geographic distribution of BCBAs, to assess competitive intensity. Payer analysis evaluates reimbursement rates by state and payer, commercial payer penetration, and Medicaid payment dynamics. Workforce analysis examines BCBA and RBT availability, wage levels, and historical turnover rates. Real estate analysis assesses the availability, zoning compliance, and cost of clinic-suitable commercial space.

The integration of these data streams is still nascent. As one industry analyst noted, most ABA providers still open new clinics based on gut feel, and the data that drives a de novo decision lives in silos across public sources, commercial filings, and internal operations. Platforms that invest in data-driven site selection—connecting CRM data, payer claims analytics, workforce databases, and real estate market intelligence into a unified framework—will make better de novo decisions and avoid the costly failures that undisciplined expansion produces.

The NIMBY Factor and Regulatory Friction

De novo expansion in ABA faces practical obstacles that acquisitions do not. One of the most persistent is community opposition. Local residents sometimes express concern about the establishment of a behavioral health clinic in their neighborhood—a phenomenon known as NIMBYism (Not In My Backyard). Dan Davidson of Brentwood Capital Advisors noted that providers opening new facilities may need to attend town hall meetings and navigate local zoning approval processes. While courts have generally ruled that blocking a treatment center can constitute discrimination against potential patients under the Americans with Disabilities Act, legal disputes are time-consuming and expensive.

State-specific regulatory requirements add another layer. ABA licensure, supervision ratios, and scope of practice rules vary by state, and the requirements for opening a new clinic—including facility inspections, fire code compliance, and ADA accessibility standards—can delay a planned opening by months. Credentialing with payers in a new market is typically a six-to-twelve-month process, meaning a de novo clinic may be physically open but unable to bill its full payer panel for an extended period after launch.

These friction points help explain why the hybrid model—acquiring a local practice to establish payer contracts and then opening additional de novo clinics—has become the preferred growth strategy for well-capitalized platforms. The acquisition solves the credentialing and market entry challenges; the de novo openings solve the economics and culture challenges.

What This Means for Practice Owners and Investors

The de novo versus acquisition debate has direct implications for both sellers and buyers in the ABA market. For practice owners considering a sale, the availability of de novo as an alternative growth channel gives buyers more leverage in negotiations. A platform that can build a clinic in a target market for a fraction of the acquisition cost will not overpay for an existing practice unless the practice offers clear advantages—established payer contracts, a stable BCBA team, strong community reputation, and clean compliance records—that de novo cannot replicate.

For PE firms and platform operators, the de novo option offers a pressure valve when acquisition multiples are elevated or when available targets carry unacceptable diligence risk. The ability to build new clinics from scratch gives platforms flexibility to maintain growth momentum even when the M&A pipeline is thin or overpriced. But de novo requires operational capability that not all platforms possess: the ability to recruit clinicians in new markets, build payer relationships from scratch, and manage the capital requirements of multiple simultaneous clinic launches.

The most successful ABA organizations in 2026 will be those that master both channels—acquiring strategically to enter new markets and building organically to expand within them. The debate between de novo and acquisition is not about choosing one over the other. It is about building the organizational capability to deploy both strategies effectively, based on the specific economics and competitive dynamics of each market.

AT A GLANCE

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