Southwest Florida Merger Creates $30M SalusCare

Addiction Treatment Industry Newswire

07/10/2013 –ATIN – In keeping with the red hot trend of local non-profit addiction treatment drug rehab alcohol rehab providers merging with their mental health brethren, a new $30M behavioral health SalusCare Inc. will emerge this week as the result of a year long negotiation to form the largest addictions and psychiatric care provider in Southwest Florida. Just a couple of weeks ago, three Orlando area non-profits merged to form Aspire Health Partners, a $90M regional powerhouse. In Texas, that state’s two largest non-profit addiction treatment providers announced their amalgamation early this year.

Long Awaited

The long talked about and awaited merger wave in the super fragmented publicly funded side of the addiction treatment business – over 9,000 centers nationwide likely – appears to be well under way, driven by ObamaCare fear and uncertainty and state funding crunches nationwide post financial crisis. Occurring now is the first part of the merger trend, where tiny local players are consolidating. As this plays out, the strongest and most ambitious competitors will start to attempt to merge the Salus’ and Aspire’s of the world to create super regional players, with likely five or six of these emerging nationwide over the next decade – with the 20 year outlook seeing perhaps even a further consolidation of the publicly funded super-regionals. Over time, the previously strong demarcation and differentiation between the public funded side of the addictions business and private funded side will start to break down, which is already occurring rapidly in the largest, super high quality clinical care deliverers like public behemoths Gateway Chicago and Phoenix House. One aggressive public side consolidation agent that appears to be emerging is the highly ambitious CEO Phil Eaton of Rosecrance, a western Illinois social services agency with an impeccable pedigree that goes back to the earliest days and most illustrious names of America’s famous Progressive social reform movement a hundred years ago. Of course the merger trend could be stopped cold, interrupted by tectonic economic and political forces too powerful to overcome as, for example, managed care interrupted and broke apart a previous addiction treatment merger wave nearly 25 years ago.

Florida Powerhouse

The new SalusCare will indeed be a local powerhouse, the result of a combination Southwest Florida Addiction Services and Lee Mental Health. Lee CEO Kevin Lewis will lead Salus, with former SWFAS CEO David Winters running operations as chief administrative officer. Salus will have seven locations in Lee County (Fort Myers) and one in 36K population Hendry County just to the east. The new entity will have 450 employees servicing 17,000 clients a year. The hugely wealthy state of Florida is 49^th in the nation for per capita public funding of mental health and addictions services.

read our report on ORLANDO AREA AGENCY MERGER

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