Recovery Centers of America (RCA), a Deerfield Management-backed provider of addiction and mental health treatment services, is pursuing acquisitions after more than a decade of predominantly organic growth, said CEO Brett Cohen.

Cohen, appointed CEO in 2023, said he spent his initial years building out the management team and strengthening RCA’s operational foundation and is now focused on accelerating growth, in part through M&A.

Ideal targets are addiction-focused treatment facilities with between around 80 beds and 200 beds, the CEO said. The company is actively pursuing opportunities in existing and adjacent markets, and opportunistic elsewhere, he added.

Deals could be funded through any mix of cash, debt, and equity, Cohen said.

Devon, Pennsylvania-based RCA operates 15 inpatient and outpatient facilities in Delaware, Florida, Illinois, Indiana, Maryland, Massachusetts, New Jersey, Pennsylvania, and South Carolina. It provides a full continuum of care that includes detox, residential treatment, outpatient services, medication-assisted treatment, and family support programming. Its campuses are generally larger than peers, Cohen noted, with inpatient facilities typically ranging between 100 to more than 200 beds.

The company also offers virtual care and mental health treatment for addicted patients with co-occurring issues and has more recently expanded into mental health primary care for patients without addiction issues.

RCA, which is approaching USD 300m in revenue, according to Cohen, has made one small tuck-in acquisition since its inception in 2015. In 2023, it acquired Adolescent & Young Adult Advocates, an outpatient mental health and addiction treatment provider serving youth and young adults in the Philadelphia area.

The company sold four opioid treatment program clinics to Pinnacle Treatment Centers in 2023 and a COVID-19 testing lab to a larger laboratory company in 2024, according to Cohen.

Cohen said RCA is profitable and aims to grow top-line revenue by 10%-20% per year organically. Most revenue is generated from commercial insurance, though the company accepts Medicaid in some states and derives a small amount of revenue from private pay, the CEO added.

RCA was founded in 2015 by J. Brian O’Neill in partnership with Deerfield, which committed USD 231.5m to fund the development or purchase of eight treatment campuses in the Northeast US. In 2016, Deerfield injected another USD 100m into RCA.

Before joining RCA, Cohen, 53, was COO of home- and community-based care provider Sevita and held senior leadership roles at Fresenius Medical Care, Kindred Healthcare, and UnitedHealth Group.

RCA is one of the larger players in the “incredibly fragmented” substance abuse treatment space, where there are few mature national platforms, according to Cohen. He said other players include broader behavioral health companies such as Acadia Healthcare and Universal Health Services, and pure players such as Bradford Health Services, backed by Lee Equity Partners and Centre Partners; Goldman Sachs Asset Management-backed Advanced Recovery Systems; and Patient Square Capital-backed Summit BHC.

M&A in the sector continues but has slowed in recent years, Cohen noted. Bradford Health acquired Parkdale Center earlier this year and Last Resort Recovery Center, Crestone Wellness, and The Chapter House in 2025.

Despite its 11-year hold, Cohen said Deerfield has a “more flexible” investment horizon than typical PE firms and is unlikely to exit for at least two years. He noted a sale to another financial sponsor as the likely outcome, given few strategic buyers with sufficient scale to acquire the business.

RCA has around 2,000 employees. It uses law firm Quarles & Brady and accounting KPMG. Its primary debt provider is Silicon Valley Bank, a division of First Citizens Bank.