Fernbrook acquisition expands services across Minnesota

It was 25 years ago when Jon and Mandy Young began Fernbrook Family Center,

He provided services; she ran the business side.

The business has grown over the years, adding more locations and services, but the mission stays the same: providing inclusive mental health services to all ages.

A month ago, Fernbrook acquired Lighthouse Child and Family Services and expanded its services to additional communities across the state.

“This acquisition allows us to reach even more individuals and families with the care, connection, and hope they deserve,” CEO Shannon Brown said. “We are honored to continue the incredible work Lighthouse has built and look forward to serving these communities together.”

The conversation

Brown, who became a minority owner and CEO a few years ago, said that the two businesses connected during the height of the pandemic.

They got to know each other more through the past few years, and last spring, the owner of Lighthouse reached out, looking for options.

“She was getting to the point that she wanted to step back from  the high level management piece and just go back to doing some clinical work part-time, and then she was curious if we would be interested in some sort of merger acquisition,” Brown said.

Brown called a meeting; Fernbrook leaders talked it through and decided they may be interested.

Eventually, the conversations turned into actions.

While Fernbrook operates in Owatonna, Faribault, Kasson, Waseca, Rochester, Red Wing, Austin, and Mankato, Lighthouse has locations mostly in central Minnesota, including Cambridge, Milaca, Sauk Rapids, and Princeton.

Brown said there are no plans to close any of them.

Size factor

One of the main differences between the two companies, Brown said, was simply the size of its staff. While Lighthouse had about 45 staff members, Fernbrook currently has over 200.

Brown said it made getting bigger difficult for Lighthouse.

As anyone in the profession or who has navigated the mental health care system knows, there is a growing demand for services.

“Expansion was difficult just due to like lack of resources, so we would love to  increase the number of services and locations that we have up in that area if possible,” Brown said. “We won't be closing any we will keep everything….nobody's jobs are being eliminated, no one's getting laid off, no programs are closing or anything. The hope is to grow it more than it already is.”

Brown explained one of the current struggles for smaller organizations is size, primarily due to reimbursement rates not keeping up and in some cases going down.

“One of our biggest protective factors is size,” Brown explained.

She said the “more people we have billing, the more revenue we can bring in, where those smaller agencies are struggling because of the rate cuts…they just don't have enough people to bill enough to make up for that.”

Brown explained in many cases, smaller agencies are selling to places like “capital equity firms” or very large companies buying them as an investment.

It was something the Lighthouse owner was not interested in.

“Oftentimes, when you lose… the culture of the agency you lose some of those values and it becomes about profit and money more so than the work that we're doing and so it was important to her that she find someone to take over who was going to keep doing the work with that … value driven like mentality and, and not just about making money,” Brown said.

Different approach

Brown explained Fernbrook differs from other providers in traditional office settings.

“One of the things that we do different than a lot of other mental health agencies is a lot of our work is in home, where a lot of other places the clients have to come to the office,” Brown said.

Brown said that has lead to many counties approaching them about bringing services to their counties “because a lot of the clients with the most significant mental health concerns cannot consistently get to an office for services.”

“They don't have transportation, they don't have child care, they're too ill, whatever it is,” Brown said, explaining in-home services have always been their main business model.

Brown said while clients are able to schedule in-office visits, providers typically schedule regular appointments in people's homes or in the community when appropriate.

Climbing the ladder

Brown didn’t start her career with Fernbrook as the CEO; and as she put it, she started at the bottom of the organizational chart.

She began in 2011 as an in-home worker, out of the Kasson office.

Right before the COVID-19 pandemic, she moved into the executive clinical director position and worked in the role for a couple of years before she was named CEO and became a minority owner.

“I started at the bottom of the food chain and have worked my way up about as high as you can go, which I think is another thing that makes us different… we hire and promote from within as much as we can,” Brown said.

Brown thinks it’s important for staff to know she isn’t in an executive suite making decisions and instead, continues to do the work.

She says it helps recruit and retain talent.

For example, the day before an interview for this story, she worked until 6 p.m. completing an intake with a family.

“I'm willing to stay late, I'm willing to fill in where I need to, and I think that goes a long way to creating a  culture in the organization that makes people wanna work there,” Brown said.