Japan’s largest intellectual and developmental disability provider, LITALICO, is entering the U.S. market by acquiring Developmental Disability Centers of Nebraska (DDCN) for $50 million.
LITALICO will pay $29.5 million upfront and $20.5 million in an earn-out over three years.
Founded in 2005, LITALICO has 300 facilities across Japan. It offers educational services, vocational services, daily skills and elderly care. It is also in the process of developing a digital platform for disability care.
Following the acquisition LITALICO plans to expand DDCN’s reach in Nebraska. It will also use this purchase as an opportunity to learn about the IDD market in the U.S., in order to promote future moves in the space, according to a press release.
DDCN was founded in 2015 and has 17 group homes in Nebraska. Following the acquisition, the company’s current CEO will continue to lead the operation. Consulting For Human Services (CFHS) provided advisory and due diligence services on the transaction.
Overall, behavioral health M&A has slowed down since its peak in 2021. And deal volume in the IDD segment typically lags behind more popular segments, such as substance use disorders, mental health and autism services.
In 2023, there were a total of 18 deals in the IDD space, down from 21 deals in 2022, according to data from The Braff Group.
Still, there have been a few notable deals recently. For example, the nonprofit network Imperium acquired the legacy IDD provider Resources for Human Development in March.
It hasn’t been smooth sailing for every IDD deal. In 2023, IDD nonprofits Merakey and Elwyn announced plans to merge, creating an organization with $1 billion in annual revenue. But the deal was later called off. C-suite executives from the organizations told Behavioral Health Business, “both organizations mutually agreed to walk away from the affiliation.”
