Two major independent not-for-profit aged care providers have this morning announced plans to merge into what will become one of the largest aged care not-for-profits in Australia, with an asset base of $1 billion.
Both RSL Care and RDNS will continue to operate under their current brands in their respective markets, but combined will form a new organisation with a yearly revenue of $500 million, employing 6,000 staff and providing care to 25,000 clients each year.
Designated CEO Stephen Muggleton, who is currently chief executive at RSL Care and formerly CEO at RDNS, said the merged organisation would be in a position to offer a “full continuum of care – from retirement villages through to respite, domestic care, residential aged care and a range of home care packages.
“That enables us to provide quite flexible responses to a range of different consumers in different markets,” Mr Muggleton told Australian Ageing Agenda.
The organisation would be looking to expand into preventative health, chronic disease management, sub-acute, rehabilitation and transition care, he said.
RDNS is a major provider of community care in Victoria and New Zealand, and has a presence in China through a series of partnerships with government and education providers there, while RSL Care provides residential, home care and retirement living predominantly in Queensland and northern NSW.
Mr Muggleton confirmed the organisation would be exploring further opportunities to grow. “We’re looking to expand quite aggressively in Australasia,” he said.
The intention was to expand residential aged care and retirement living into other states, and use the expertise within RDNS to provide a range of services into retirement villages and the wider healthy ageing space, he said.
Discussing the impetus for the merger, Mr Muggleton said both organisations were experiencing significant increases in demand and were trying to respond to market changes, increasing expectations and competition, and the need to provide a continuum of different and tailored services.
After considerable independent due diligence, there was a recognition at board level of the “very synergistic and complementary range of services” across the organisations, with not much overlap, said Mr Muggleton.
“There’s also 200 years combined history in this, which gives it tremendous strength… It’s a merger of two strong organisations, neither is distressed in any way, both are operating at optimum level,” he said.
In terms of staffing implications, the senior executive teams in both organisations will remain. “We’re pretty lucky we have a mix of executives in different capital cities being able to fulfill capability gaps in the other, so we’ll have a mix of existing executives merging together to form a new executive leadership team for the group,” Mr Muggleton said.
The boards of the two organisations will merge and then quickly go through a board skills mix exercise to reduce the number of board members early in the new calendar year, he said.
Today’s merger announcement comes amidst increasing, and some say unprecedented, merger and partnership activity in the not-for-profit aged care sector, as AAA reported last month.
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Congratulations to both organisations.
Mergers can be a challenging process, don’t leave out the leadership elements of building this new organisation.
Good luck and the ACCLM is here to support your teams and their personal growth and professional development.
Drew
The potential of an RSL Care and RDNS merger is mind blowing when the strengths of both organisations is combined with their geographic reach and depth.
The potential for the customers and the staff is really exciting as the merged organisation shows its potential as a national and international thought leader in aged and the primary care continuum.
My personal best wishes to Stephen Muggleton in building an even greater organisation. I am proud to have played a distant part in the growth and development of RSL Care.
Cheap plug, Drew.
Retaining their own brand disguises this as ‘claytons’ merger, but make no mistake about the direction we’re heading. Behemoths lobbying at the gates of policy, shovelling their own agenda and pushing self-interest.
This is just about having a bigger seat at the table, there’s nothing for the consumer here. Mergers are indeed a challenging process. . the legal bills will be testament to that. Congratulations ?
What Kathy said.
I think mergers are good when smaller organisations join to offer more services to benefit the clients, however in this merger I would expect an element of fear that becoming too big the client gets lost in all the beaurocracy of leadership. Beware bigger is not always better!
A merged RSL Care and RDNS will deliver a much more diverse, complementary and robust business with a strong mix of federal, state, local and customer funding sources. Im sure a strong customer, quality and caring focus can be maintained on a national basis, with significant operational and overhead benefits.