Could This Merger Mark The Beginning Of Senior Living Consolidation?
The merger of American Baptist Homes of the West (ABHOW) and BeGroup, given the green light from regulators last month, will create California’s largest and the nation’s sixth-largest senior living nonprofit.
The two entities will operate under the corporate umbrella of Cornerstone Affiliates, according to the San Francisco Business Times. Cornerstone is a holding company with interests in senior care, affordable housing and a for-profit sales and marketing group.
BeGroup CEO John Cochrane will assume responsibility for both senior living companies while ABHOW head Dave Ferguson plans to retire in 2017 after a period of transition.
The new entity holds $1.5B in assets and generates $360M in revenue using 2015 figures. Cornerstone will assume care for approximately 10,000 seniors across 84 sites across the Western states.
A recent CBRE report showed senior housing companies had saturated the market. The resulting downward price pressure from overbuilding could drive consolidation across all segments of the senior housing sector. [SFBT]