According to Senior Housing News, senior living nonprofits bouncing back from the recession see mergers and consolidations as good strategy in today’s market.
The recent 18th Annual Ziegler Senior Living Finance and Strategy Conference cited health care complexities, leadership turnover, and technology demands as the biggest influencers of consolidation within the nonprofit sector. In 2010, the top driver was financial distress.
Dan Hermann, head of investment banking for Ziegler, says nonprofits are “deciding they can have more leverage or bargaining power if two systems come together.”
In addition, Greystone Communities President Mark Andrews notes that many single-site campuses are affiliating with regional or national not-for-profits to establish a stronger asset or capital base.
Money isn’t the only reason to merge, however. Hermann claims that 21st-century pressures on the industry are leading more campuses to team up. Affordable Care Act requirements, managed care pressures, and bundled payment initiatives make health care delivery increasingly difficult to manage alone.
Technology geared toward on consumers and their increasing desire to age in place also pushes decisions to invest in order to remain competitive.
Source: Senior Housing News. Senior Housing Deals Surge as Nonprofits Power Up
