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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