Recovery Centers of America in Big $230M Capital Raise  E-mail
Addiction Treatment Industry Newswire

12/24/2015 -ATIN - A major development occurred last week in treatment finance when Recovery Centers of America, RCA, and its CEO businessman Brian O'Neill raised $230M from private equity house Deerfield Management Company, which has also provided funding to Michael Cartwright's fast growing new public company American Addiction Centers (AAC: NYSE) At $230M, small by Wall Street's mega billions standards these days, the financing is one of the largest from the perspective of the standards of the addiction treatment industry, which is a highly fragmented business dominated by small players. There are more than 10,000 treatment centers across the nation with residential centers averaging less than 50 beds.

Plans to Build and Buy

RCA's plan is to realize successfully on a strategy to open or buy 8 new treatment centers it seems mostly in the Middle Atlantic and Northeast, or to use what may have become an antiquated phrase, centers throughout "Megalopolis." That's the highly populated area between DC and Boston for which the famous urbanologist Jane Jacobs coined the term and whose addiction treatment industry demand Florida has been siphoning off since the beginning of the contemporary addiction treatment industry's earliest days in the 1970s. Here's what Recovery Centers of America has the say about that: "This (RCA) is a revolutionary change from today's care paradigm that too frequently relies on a patient leaving their community for treatment," which RCA goes on in a press release to describe as "needless."

Swipe at Florida

This, expressed in couched terms, is a deliberate swipe at the arguably largest addiction treatment industry "hub" in the nation, the Great State of Florida. If you haven't been reading Treatment Magazine, well you should have cause we have been writing about the "hub" structure of the addiction industry for years. It refers to the areas where large amounts of centers congregate because of ease of regulation, but mostly they are in attractive "destination" areas like South Florida, Southern California and Arizona. We could not applaud RCA enough for their vision of helping create an addiction treatment system that is more integrated into the mainstream medical system and providing nearby high quality centers in treatment deserts throughout the Northeast.

Formidable Obstacles

But there are formidable obstacles facing RCA, not least is a massive shortage of executive and clinical treatment talent to staff new, greenfield center development and the continuing presence of NIMBY despite the desperate need for RCA's new centers. But RCA founder and CEO businessman Brian O'Neill already has highly experienced staff like Deni Carise heading clinical at RCA and we wish Mr. O'Neill the very best of luck in executing on a strategy we agree with wholeheartedly. But already, according to published reports, RCA is running into NIMBY problems. The map shown here in this story was provided by RCA and shows its currently planned sites for its centers. Not on the map though is a 19.2 acre property in Haddonfield, NJ, an upscale enclave in which, according to published reports, RCA bought a facility known locally as the Bancroft property. Since the Bancroft property is not on the map of planned RCA sites, RCA may be reacting to strong opposition to a center at the site voiced by Haddonfield residents in a meeting held with CEO O'Neill in April, according to published reports.

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Ted Jackson


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