Brightli, Centerstone merger poised to create largest US behavioral health provider at $1B

A planned merger of Springfield-based Brightli Inc. and a provider from Nashville, Tennessee, stands to become the nation’s largest behavioral health services nonprofit on the basis of revenue.

Brightli, the parent company of Burrell Behavioral Health, and Centerstone announced this month that they penned a nonbinding agreement and are in a due diligence process for the merger, with an anticipated closure in November.

The name of the combined organization has not yet been determined, officials say.

The new organization’s projected annual revenue would be roughly $1.1 billion, according to a joint media release. The organization would be the first of its type to reach that revenue level, according to Rance Burger, director of media and public relations for Brightli. He added that about $550 million of that total comes from Brightli.

Brightli has 220 locations and some 6,000 employees, while Centerstone has 140 locations and 4,300 employees working domestically and an international network of 1,500 more. The combined organization would span 11 states plus international locations.

Many key details are yet to be hammered out. Brightli CEO C.J. Davis said both organizations have strong brands. Its leadership is also a question mark, as is the location of its corporate headquarters. Burger called the agreement “a merger of equals.”

Officials declined to disclose the financial terms of the merger.

Leaders come together
Centerstone CEO David Guth told Springfield Business Journal that he is at the zenith of his career, suggesting that succession is on his mind, though he noted that neither leader is going anywhere in the near term.

“I’m a fair bit older than C.J.,” Guth said. “He’ll be around long after I retire.”

Guth said he has long been impressed with Davis’ leadership.

“He’s been on my radar,” he said. “I’m starting to get really familiar with the inner workings of Brightli, and it’s struck me not only what a great, talented team he’s put together, but how well they work together to support each other. That’s something that’s rare in most organizations, to see that level of talent, but also collaboration, support and aligned commitment.”

Both organizations have built up over time. Brightli is the product of 25 mergers – 10 of those amassed during Davis’ eight years at the helm of Burrell, then Brightli – and Centerstone brings 20 more to the table.

“It’s interesting, because between Brightli and Centerstone, I think we’ve got 45 legacy organizations,” Guth said, referring to the nonprofits consolidated into each through the M&A process.

Guth said he started his career in an unnamed Centerstone legacy organization with a budget of about $3 million and staff meetings held in his home. The nonprofit couldn’t afford a retirement program for its staff and it barely had a medical benefit, he recalled. Additionally, only a few services were offered, and people in the community had to fit their needs into one of those existing services.

“We had some organic growth, but I quickly realized there are other organizations that in a very similar manner wanted to increase their capability and what they were going to do for their communities, for the people they serve and the staff that serve them,” Guth said. “I started seeking those folks out.”

Guth became a leader in nonprofit mergers. In fact, he wrote the literal book on the subject: “Strategic Unions: A Marriage Guide to Healthy Not-for-Profit Mergers.” Davis noted both of the leaders are on the national presentation circuit on the topic of M&A.

Twenty years ago, Davis said, he met Guth at a conference, where he was speaking on the topic of going big or going home.

“I thought, wow, what a concept, to grow a community mental health center through strategic partnerships,” Davis said.

The two stayed in touch, and in January 2024, Guth reached out to Davis to ask if he would be open to a conversation about a merger. Key staff members and board members have been meeting since then in working groups to prepare for the expansion, Guth said.

Merger rationale
Why the zeal for mergers? Davis called mergers and acquisitions a strategic opportunity.

“In behavioral health, organizations have been so small, and you really can’t do everything you need for people,” he said. “One thing you can do is just slowly and organically grow, or you can go out and search for partners that allow you to advance yourself in areas of weakness.”

Davis gave the example of Columbia, where Brightli had no contract for addiction treatment and purchased the Phoenix Clinic. Likewise, a 2022 partnership between Burrell Behavioral Health and Preferred Family Healthcare Inc. created Brightli and added the element of a federally qualified health center to the mix.

“It’s always about trying to find those puzzle pieces to enhance the services that you provide,” Davis said.

He added there are economies of scale the larger an organization gets, and the influence of the organization expands with growth.

“The larger you get, there’s more opportunity to influence, whether that’s with lawmakers, with the industry, with the science – whatever it may be,” he said.

One of the most important reasons for mergers is addressing workforce needs, Davis said, adding that the larger Brightli becomes, the more attractive it is to workforce members, who can operate in cities like St. Louis or Kansas City; Indianapolis; Tulsa, Oklahoma or now Nashville. He added that providers are not typically attracted to small rural centers.

The federal government’s National Center for Health Workforce Analysis highlights the challenges of hiring adequate workforce for the industry, and notes rural counties are more than twice as likely to be without behavioral health providers.

The ability to hire means less wait time for people who need Brightli’s services, according to Davis.

“We went all chips in to hire as many therapists as we can,” he said. “We hired 268 therapists last year. There are centers in community mental health that don’t have 268 employees. When you have these kinds of numbers, it allows you to do things you just couldn’t do before.”

Davis said he has fielded some questions from the public about Brightli’s growth strategy.

“I sort of take some heat publicly – ‘There they go, growing again,’” Davis said. “Our plan has never been grow to grow. Our plan has always been deliberate and intentional – to better serve.”

Guth noted Centerstone’s comprehensive situation training program for clinicians is the first of its kind in the U.S. Fueled by artificial intelligence, the program is a tool to prepare clinicians for the field.

“It’s the idea of giving our clinicians what they deserve – the support and tools to be sure they are absolutely comfortable with the best, proven clinical practices,” he said.

Research gains
Economies of scale don’t apply only to financial considerations. Together, the entities would have the opportunity to grow their research capacity.

“Our goal is to help really accelerate the adoption of the best science,” Guth said. “We want to be a beacon for other organizations in our industry. If they’re not big enough to decide what’s the best treatment today or what the best tools are for staff to get confident in their practices, they can look to us.”

Guth said Brightli and Centerstone are working in parallel to bring the best research to light, particularly when it comes to best clinical practices.

“By bringing together scientific leadership, research partnerships, technology partners – I feel like this is just the perfect time to align those efforts,” he said.

Davis said he sees the merger as an opportunity to transform how care is delivered, in part through a focus on research.

“We’ve been providing care very similarly for a lot of years, and some of those care systems need to change,” he said. “Somebody needs to be the vehicle of behavioral health that can creatively take up that space and help transform how care is delivered in this country, and we have that opportunity.”

Local impact
Paul Williams, chief of the Springfield Police Department and chair of the Brightli Board of Directors, expressed his optimism for the merger, noting that right now, both organizations are in the due diligence stage – “kicking the tires,” as Williams put it.

Williams said people in the community are unlikely to experience change in the services they receive from Brightli.

What happens outside the care environment promises to be transformational, however, according to Williams.

“Economy of scale is a good thing,” he said. “It means being able to offer more services, serve more people and have more positive results across a broader spectrum of the community.”

He added that the board wants to add rather than duplicate services, and what Centerstone adds is a great technological component through their innovation center, the Centerstone Research Institute, which encourages a supportive environment to facilitate the adoption of new practices, according to Centerstone’s website.

Williams said Centerstone is also a leader in veterans’ services.

“There a couple of things that we at Brightli have dipped our toe in, but we don’t have the same level of experience,” he said. “That might be very, very helpful here.”

The merger would be beneficial to employees and the community, Wiliams said.

“Nationwide, we’re at the tipping point in the delivery of services for mental health, substance abuse, developmental disabilities services,” he said. “Being able to be the largest provider in the country, if this goes through, means being able to draw on those resources.”

Williams also pointed to the expanded influence the merger would provide.

“Through the innovation center and potential partnerships with academic and government institutions, it gets your foot in the door,” he said. “When you’re this size and scale, folks who wouldn’t have looked at us before will say, ‘What can we do for you?’”