Christopher Donovan Discusses Investment 'Shake-Out' in Applied Behavioral Analysis Space

Foley & Lardner LLP Partner Christopher Donovan was quoted in the Behavioral Health Business article titled, “Why the Massive Investment in Autism Companies Created a ‘Ticking Timebomb’,” discussing the mass layoffs in the applied behavioral analysis space, triggered by a well-intended investment surge and high labor costs.

Referencing the layoffs, Donovan said that “investors are going to want to focus their portfolio companies on actually making money and many of them don’t at this point,” forecasting three things for the market over the next year and a half: “reset, pause, shake out.” The shake-out will likely lead to a slowdown in investment as private equity firms reassess the behavioral health market. However, this shake-out could push more deal activity, noting that “a lot of the labor problems that are out there now can be solved to some extent by horizontal M&A activity.”