Fulcrum Equity Partners has acquired substance use disorder (SUD) treatment provider Defining Wellness Centers. The purchase comes after a multi-year search for an asset in the addiction treatment space.
The investment will spearhead Jackson, Mississippi-based Defining Wellness Center’s growth and further Fulcrum Equity Partners’ behavioral health presence.
Atlanta-based Fulcrum invests in health care services and B2B tech companies seeking between $5 million and $30 million of equity.
The growth equity firm considers around 1,200 deals a year and closes around three, Fulcrum partner Tom Greer told Behavioral Health Business. Defining Wellness, with its 26-acre campus, “checked a lot of boxes” to lead Fulcrum to sign off on the deal.
Defining Wellness has around 95 to 100 patients a month and almost all of its services, around 95%, are paid for via in-network insurance. In-network reimbursement was one of Fulcrum’s priorities for a new SUD asset.
Fulcrum appointed Drew Rothermel as Defining Wellness Centers’ new CEO. Rothermel has previously served as the chief operating officer at Caron Treatment Centers, CEO and president of Origins Behavioral HealthCare, and as a health care consultant to several private equity firms.
Rothermel will seek to refine and expand the programs currently offered at Defining Wellness and then replicate the model in other geographies. The business will leverage a mostly de novo strategy for growth but will also consider M&A.
“The community here is desperate for a partner who’s going to meet the treatment need and also be a visible proponent for treatment and access to care,” Rothermel told BHB. “We know how to do that.”
The behavioral health provider will look to expand in areas with ample staffing pools and positive payer environments.
“We’ll find other properties that look similar, or find something that’s close and make it similar,” Greer said. “That’s what we did with our other investment, Addiction Campuses. We would find a property, whether it was an old boys’ boarding school, an old resort or corporate retreat, and turn it into a high-end residential facility. We’re going to take pretty much the same game plan on that and look for those opportunities to do de novo plays.”
Defining Wellness provides a full continuum of care, including medical detox, inpatient rehab, partial hospitalization and outpatient. It may now branch out to cover even more services.
“We are looking for the right asset in eating disorders,” Greer said. “There’s a huge demand for those services and that demand outstrips the supply right now. … We may make a more comprehensive behavioral company [out of Defining Wellness] by offering that in some locations.”