The predominant treatment for autism is based on the science and methodology of Applied Behavior Analysis (ABA). ABA is one of the few areas that attracts bipartisan political support and as of August 2019, all 50 states in the U.S. mandate insurance coverage of autism services. Services are provided in the home, at center-based programs, at school, or in hybrid models that serve multiple locations. ABA is considered the gold standard of treatment for autism. The National Research council recommends a minimum of 25 hours per week of student engagement. While many service providers offer ABA-based programs, not all ABA is the same. It is critical to assess the quality of programming and service delivery when considering an investment in an autism company.

The ABA market is growing at twice the rate of other multi-site healthcare businesses. With greater awareness, we are seeing the beginnings of a reduction in the social stigma of autism and a formal diagnosis of autism leading more families to seek intervention and support. As funding for autism services and awareness of autism is expanding, more and more families are seeking services nationwide. Most providers report waiting lists for assessment and diagnosis, as well as intervention, leading to rapid growth in this industry. In addition, there are many underserved communities where services are lacking bringing multiple organic growth opportunities to existing providers.

In recent years, significant investments in autism service providers have occurred resulting in the beginning of consolidation of this market. This interest and investment trend is driving a new level of competition and increasing the standards against which providers need to comply and perform. Despite this growth, however; less than 20% of the autism service industry is owned by consolidators providing much opportunity for continued investment in this market. As consolidators continue to buy up the market, issues such as the integration of clinical methodologies, operational processes, regulatory compliance and administrative functions bring new challenges, especially because the industry is relatively young and unsophisticated from a business operations standpoint.

The total annual costs for children with ASD (autism spectrum disorder) in the United States are estimated to be between $11.5 billion and $60.9 billion — a significant economic burden. It is estimated that the current ABA service provider market is about $7bn with a TAM (total addressable market) of between $50-70bn. The ABA therapy market is expected to grow at a 25% CAGR over the next 3-5 years. The needs of the aging autism population are grossly under serviced providing significant needs across the nation and additional opportunities for investors and providers. Many autism treatment organizations, and some of the largest competitors are located in California. This is due to the fact that funding for treatment programs has been in place there for over 5 decades, prior to the insurance mandates that were later put into place.