Leonard Green’s Stepping Stones Rolled Up School-Based ABA

The Roll-Up Hiding in Plain Sight

BOSTON – While federal auditors spent two years recovering tens of millions of dollars in Medicaid funds from autism-therapy clinics, one company kept building its clinical workforce in a place auditors rarely check: public school districts. That’s the main point of this story.

The Stepping Stones Group, a Boston staffing company owned by Leonard Green & Partners, provides behavior analysts, technicians, speech and occupational therapists, school psychologists, and special-education teachers directly to districts. The company says it now works with 1,394 school districts. It has appeared on the Inc. 5000 list of the fastest-growing private companies for nine consecutive years, ranking No. 2,545 in 2024 with 203% revenue growth.

This rapid growth was driven by acquisitions, a strategy typical of private equity firms looking to build scale. Since 2019, Stepping Stones has absorbed New England ABA, EBS Healthcare, The Futures Health Group, the Center for Behavioral, Educational, and Social Therapies (C.B.E.S.T), HM Therapy, and Gallagher Pediatric Therapy, among others. In early 2026, it added Invo, a school services contractor supplying districts across more than 50 disciplines.

That contrast is the point. In a clinic, these clinicians generate Medicaid claims an auditor can claw back. Sold to a school district, the same work becomes an invoice no one can claw back. That difference is why the district lane matters.

Three Owners in Eight Years

Shore Capital Partners, a Chicago private equity firm, created Stepping Stones in 2014 by combining two school-therapy staffing companies, MyTherapyCompany and Cumberland Therapy Services, into a single platform. Shore recruited Anthony Rintala in 2015 to run it, added AlphaVista Services in 2016, and Staffing Options & Solutions in 2017. Then, in January 2018, it sold the company to Five Arrows Capital Partners, the North American private equity arm of Rothschild & Co, while keeping a minority stake. At that sale, Stepping Stones had roughly 900 clinicians serving more than 300 districts and 42,000 children across 20-plus states.

Under Five Arrows, the acquisition pace quickened. In November 2021, the firm put the company up for sale and fielded first-round bids, PE Hub reported. On December 1, 2021, Leonard Green & Partners, a Los Angeles firm managing about $85 billion, bought it in a secondary buyout, and Five Arrows recorded a partial exit. By then, Stepping Stones described itself as a provider with more than 6,000 clinicians serving about 300,000 children a year across 42 states.

Tim Murphy, who became chief executive in 2018, has continued to make acquisitions even after the company changed hands.

“The Stepping Stones Group has developed a differentiated technology-led model which provides critical services to students at hundreds of school districts across the country.” – Ari Benacerraf, Founding Partner, Five Arrows Capital Partners (2018)

How the School-Staffing Model Pays

How Stepping Stones operates sets it apart from ABA companies under federal scrutiny. Clinic- or home-based ABA providers bill Medicaid or commercial insurance for each therapy session at rates set by the payer and are only paid if the paperwork passes a post-payment audit. In contrast, a school-staffing company sends the district an invoice for a contracted clinician. The district pays from its own budget, which is funded by local taxes, state aid, and federal special-education funds. This is the main structural difference in the story.

This difference matters because a school district’s budget is not the same as a claims payer. There is no Medicaid fee schedule that sets what a district pays for a contracted BCBA, and a staffing invoice to a district is not a Medicaid claim. The systems that states and federal contractors use to recover Medicaid overpayments do not apply to district purchase orders. District contracts are usually negotiated for a school year and renewed each year.

This does not mean the model is unregulated. Districts handle procurement, and the work must still be delivered and documented. However, the oversight is mainly budgetary and political. Medicaid’s payment-integrity system, with its prior authorizations and post-payment clawbacks, does not apply to district contracts. Any review happens after the money is spent. That gap is important.

Why Private Equity Wants This Lane

The appeal to a financial sponsor is clear. Demand is structural. Special education is the hardest teaching category to staff in the country: in the federal School Pulse Panel, 74% of public schools reported difficulty filling vacancies for 2024-25, and special education was the position they struggled to fill most. That shortage pushes districts to contract for BCBAs or speech therapists, and scarcity often gives contractors pricing power.

This area is profitable enough to attract other big investors. In July 2024, The Vistria Group paid about $2.5 billion for Soliant Health, a staffing company whose K-12 education segment makes up about 75% of its revenue and 80% of its EBITDA. The deal valued Soliant at about 9.6 times EBITDA. Vistria’s ProCare and Sunbelt Staffing units, along with Stepping Stones, are among the private equity-owned contractor districts now relied on. Margins for the school-staffing model are not public, and Stepping Stones does not share them. One recent case study looked at West Contra Costa Unified School District in California, which spent over $14 million in 2024-25 on three private equity-owned special-education contractors, including Stepping Stones. If the district had hired that staff directly, the group estimated it would have saved nearly $6 million, enough to hire more than 200 permanent special-education employees.

The Scrutiny Is Starting to Arrive

The district approach is starting to get noticed. The same watchdog report said Stepping Stones agreed last year to pay $4.25 million to settle a class action over wage-and-hour claims by current and former employees. West Contra Costa’s spending on outside contractors more than doubled in five years, from $59 million in 2019-20 to $117 million in 2024-25, rising from 16% to 23% of district spending. This trend is drawing attention from the school board and the union.

The model carries the same macro risk as the rest of school finance. The $190 billion in federal pandemic relief that propped up district budgets, about half spent on staff, had to be obligated by September 30, 2024. As that money runs out, districts face a fiscal cliff that will test whether they can keep paying premium contractor rates.

Stepping Stones is not just a school vendor. Through New England ABA and its clinics, it also provides home, community, and center-based autism therapy that bills Medicaid and commercial insurance, the same payer lane facing pressure elsewhere. Still, the large-scale growth that made it a major player happened on the district side.

Now that federal relief is gone and districts are planning their 2026-27 budgets, the big question is whether they will keep paying high contractor rates or bring special-education staffing back in-house. Each district’s decision over the next year will determine how much more the roll-up can grow.

AT A GLANCE

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