Behavioral residential health provider Beacon Specialized Living has entered the senior living industry by acquiring an assisted living and memory care operator based in Minnesota.
Beacon last week announced it had acquired senior living operator Hometown Senior Living and its portfolio of seven assisted living and memory care communities located in small towns just east of Minneapolis, including one across the Mississippi River in Wisconsin. The communities range in size between eight and 12 units.
Helios Healthcare Advisors facilitated the Hometown sale. Beacon is backed by health care private equity firm Pharos Capital Group.
For Kalamazoo, Michigan-based Beacon, the acquisition was meant to add to and complement the services it already provides. Currently, Beacon focuses on operating small residential communities that serve residents of all ages with behavioral health care needs.
The Hometown communities are also small, residential communities; and with the acquisition Beacon sought to gain the ability to house and care for older adults in addition to its other services, according to CEO Darren Hodgdon.
“We have a lot of aging residents that are going to need a higher level of care,” Hodgdon told Senior Housing News.
Offering a wider continuum of services, such as assisted living and memory care, also serves as a differentiator for Beacon, he added.
Expanding care compatibilities through acquisitions has been a core part of the behavioral health company’s growth strategy.
For example, Beacon first expanded into Minnesota in 2019 by acquiring Owakihi Inc., a residential services provider specializing in child and adolescent crisis homes, a service the company previously did not offer.
Beacon, already the largest provider of its kind in Michigan, is similarly seeking to further its growth into the senior living industry.
“We’ve been talking with a lot of long-term care providers over the last couple of years trying to figure out how we can complement their business,” Hodgdon said.
Acquiring Hometown also made sense geographically, as Beacon already operates in Minnesota and Wisconsin as well as in Pennsylvania and New Jersey.
While the Midwest and Northeast will continue to be a key growth area for Beacon, the company is looking westward at markets such as California or Arizona, should the opportunity arise, according to Hodgdon.
The company’s growth to new markets depends largely on how the larger state’s Medicaid payment system is regulated and orchestrated, given how much the company relies on those dollars, according to Hodgdon. Minnesota is advantageous for operators like Beacon because the payment system is relatively straightforward, he added.
“This is going to be perfectly aligned for the future of the age and service curve that is naturally going to occur as we continue to grow our footprints across the country,” Hodgdon said.