Merakey and Elwyn, two nonprofits that provide services for people with intellectual or development disabilities and behavioral health challenges, are considering merging. The talks are preliminary and ongoing. If the merger happens, the resulting organization will generate more than $1 billion in annual revenue.
Merakey, Lafayette, Pennsylvania, annually serves more than 30,000 individuals and families via more than 660 locations in 12 states. The organization was founded in 1969 as the Northwest Center, rebranding itself as Merakey in 2018. Media Pennsylvania-based Elwyn supports more than 20,000 individuals within four states. Elwyn has been in existence since 1852.
The combined organizations would employ more than 12,000 people, according to a statement announcing the merger talks. According to Elwayn’s website, the nonprofit generates more than $400 million in annual revenue. Merakey reported $618 million in revenue in its 2021 annual report.
“The combined organization could become an employer of choice in our industry, one that could attract and retain the talented individuals who have made both of our organizations successful.” Merakey CEO Joseph S. Martz said via a statement. “An affiliation would maximize the resources to allow for significant new investment in programs and permit technology improvements that would be game-changing in terms of delivering a coordinated array of services.”
“We are greatly encouraged by the prospect of exploring an affiliation with Merakey,” Elwyn President and CEO Charles S. McLister said in a statement. “Together, our combined companies could set a new standard of excellence in service delivery, and we look forward to the next phase of this process, which is to complete our due diligence to validate the concept.”
The timetable for the merger talks is loose: due diligence activities are expected to take “the next several months,” according to the statement. If these conclude with a decision to merger, the agreement could be signed by mid-summer, at which point regulatory approvals would add “several months” to the process.
The merger consideration comes at a time when many care-related organizations are struggling to find adequate staffing. According to Covid-19 Pandemic Impact on the Pennsylvania ID/A [intellectual disability/autism] Workforce Crisis, a report from Pennsylvania Advocacy and Resources for Autism and Intellectual Disability, in Pennsylvania the pre-pandemic job vacancy rate for direct support professionals was 20%, with annual turnover rates running at 32%. The coronavirus pandemic exacerbated these trends, according to the report.
The behavioral health industry as a whole is facing challenges. In a November 2022 article, Behavioral Health Business reported that autism services providers had overextended themselves, and that “Throughout 2022, some of these companies were forced to cut back operations to match economic realities in local employment markets and limited reimbursement increases.”
