Background and challenge

With one in 45 children in the United States having autism today, up from only one in 150 children in 2000, the market for treatment is rapidly growing. While drugs were used historically to treat the symptoms of autism, Applied Behavioral Analysis (ABA) programs have demonstrated positive outcomes and are becoming more widespread. Analysts estimate the autism treatment market will exceed $2 billion by 2022, and investment firms are taking notice.

The client was a private equity firm that was considering investment in a regional leader in ABA services. A key challenge was understanding the target’s future market position and growth potential. How was the target perceived in the market, and would national ABA providers enter the region and rapidly capture its share? Were there attractive expansion opportunities to continue to drive the target’s growth? L.E.K. Consulting was enlisted to conduct commercial due diligence of the Target and develop a framework for assessing expansion opportunities.

Approach and recommendations

We conducted in-depth primary research with a variety of stakeholders including caregivers, physicians and ABA providers. Research focused on market and competitive dynamics to understand the Target’s market position and potential for future growth. Key topics included:

  • Referral process for autistic patients from diagnosis through patient care
  • ABA provider selection process and sources of influence
  • Customer feedback on the Target
  • Competitive landscape, including potential for national providers to expand into the Target’s region

Synthesis of primary and secondary research indicated that the caregiver, followed closely by the physician, often has the greatest influence on selection of ABA provider once health plan coverage is approved. The market perceives the target as a fast-growing, reliable provider of ABA therapy with strong marketing and back-office capabilities that enable service of a broad set of patients (e.g., a wide age range). In addition, expansion of national players into the target’s region is not anticipated in the near term, given that there are only a few large national players and most are focused on other regions and/or addressing existing demand.

Next, we leveraged interview feedback from ABA providers as well as our experience as the basis for developing a framework to evaluate the attractiveness of individual states for expansion by the Target. We found that while there are a number of factors that influence expansion opportunities, favorable reimbursement dynamics and penetration of board-certified behavior analysts are the most crucial considerations for the target.


Equipped with a thorough assessment of the Target’s competitive positioning in its local market and its potential for future growth, the client moved forward with the transaction. The framework for evaluating expansion opportunities provided valuable support in identifying attractive opportunities for growth following integration.

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