SUN Behavioral Health’s Game-Changing Acquisition: The Secret to Lasting Recovery Revealed

SUN Behavioral Health has just snapped up Seaside Healthcare’s multi-state home-and-community-based services (HCBS) business—and it’s poised to transform how we think about long-term behavioral health care.

Seaside Healthcare, based in Shreveport, Louisiana, recently divested its two main behavioral health divisions. SUN Behavioral Health picked up the outpatient therapy arm, while The Graph Group secured the acute and intermediate care services. This strategic split, orchestrated by Seaside’s former backer Pharos Capital Partners after an almost 11-year hold, was designed to sharpen each segment’s clinical focus.

Headquartered in Red Bank, New Jersey, SUN Behavioral Health is on a mission to unify diverse care levels under one roof for patients with complex needs. “If we can engage folks who usually only show up in crisis—and guide them through sustained recovery—we can boost outcomes and cut down on repeat behavioral and medical admissions,” says Steve Page, SUN’s president and CEO, in an interview with Behavioral Health Business.

• Alliance’s Bold New Hires & HarmonyCares’ C-Suite Overhaul
• Elevance Calms Wall Street Jitters After UnitedHealth Shake-Up
• Former CEO Stephen Hemsley to Steer UnitedHealth as Andrew Witty Steps Aside

With this deal, SUN acquires Seaside’s HCBS operations across Georgia, Louisiana, North Carolina, South Carolina, Texas, and Virginia. These services, traditionally in the nonprofit human-services domain, deliver intensive medical and social support directly in patients’ homes and communities. Meanwhile, The Graph Group takes over an inpatient psychiatric hospital and affiliated partial hospital program (PHP) in Baton Rouge, Louisiana, complete with housing assistance.

Currently, SUN’s existing facilities don’t overlap geographically with Seaside’s HCBS sites—except in Houston, Texas, where SUN already runs a 148-bed psychiatric hospital. “We’re piloting integration between our acute-care hospital and these HCBS offerings right now,” Page notes. SUN also operates hospitals and high-level outpatient programs in Erlanger, Kentucky; Columbus, Ohio; and Georgetown, Delaware.

The savvy of this structure lies in its payer alignment: SUN’s Medicaid-covered outpatient population meshes cleanly with Seaside’s HCBS clients, while The Graph Group’s facilities predominantly serve Medicare-covered, permanently disabled patients. By keeping those lines clear, each organization can tailor its clinical and financial models more precisely.

Industry experts agree that weaving together acute care, outpatient therapy, and wraparound social services—like in-home support—can yield a triple win: better patient health, fewer readmissions, and lower costs for payers. “We keep seeing the same patients bounce back into crisis because there’s little engagement between episodes. Sustained treatment is tough—but it’s exactly what’s needed,” Page explains.

Behavioral health providers also struggle to reach patients between crises, partly because funding from states and payers tends to be “modest” and payment models aren’t built around continuous engagement. Plus, patients can be wary of new organizations entering their care ecosystem. Yet if SUN’s plan succeeds, it’ll validate a powerful investment thesis and open doors for SUN to build or buy hospitals in under-served HCBS markets.

Rebecca Springer, director of market development at Bailey & Co., which represented Pharos in the sale, underscores the enduring appeal of multi-acuity platforms: “Providing care across acuity levels—while keeping patients in the community—remains a strong model. Here, splitting the assets made sense, but the core idea isn’t going anywhere.” (Bailey & Co. details on the deal are available via Behavioral Health Business.)

Pharos Capital originally backed Seaside Healthcare in 2014 when the company operated two facilities and managed others’ sites. Over the past decade, minimal overlap between Seaside’s HCBS and inpatient populations made a dual-deal exit seamless: SUN took the Medicaid side, The Graph Group the Medicare side.

Medicaid and Medicare each serve distinct safety-net demographics—Medicaid covers vulnerable groups like children, pregnant women, and low-income individuals under state-federal partnerships; Medicare serves seniors and younger people with certain disabilities under federal oversight. Investors prize providers focused on these government-covered markets for their stable demand and because fears of major Medicaid cuts have eased since the One Big Beautiful Bill Act debate under the Trump administration.

“It’s vital to treat patients holistically to rein in overall healthcare costs. Mental health is central to that,” notes Stephen Scott, managing director at Bailey & Co., in Behavioral Health Business. “Despite policy noise in Washington, demand here is only growing.”