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Lutheran Senior Services, Diakon Plan Merger in Bid for Greater Scale

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Senior living operator Lutheran Senior Services (LSS) has agreed to merge with another nonprofit in a move that CEO Adam Marles said will help the organization better prepare for the coming two decades.

LSS recently announced its intent to merge with Diakon, a Lutheran-aligned senior living operator based in Pennsylvania. With the move, LSS is adding four life plan communities to its portfolio, which will encompass a dozen life plan communities, one assisted living community and nine affordable senior housing communities when all is said and done.

Marles, who has led St. Louis-based LSS since 2021, said the decision was driven partly by a belief that “scale is going to matter for the success of non-profit senior living moving forward.”

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“It will make sure that we are better able to compete for talent; make sure that we can continue to add and to grow specialty positions within the organization; create career-ladder opportunities for our team; and then obviously, increase purchasing power, negotiating power, spread overhead, improve access to capital,” Marles told Senior Housing News.

The newly combined organization would have a combined total of more than 3,500 team members with more than 5,300 residents and rank as the 12th largest non-profit senior living operator, at least according to the most recent LeadingAge Ziegler 200 report, released last year.

Factors going into the agreement, according to Marles, includes Diakon’s long term “legacy of serving their residents well” and relative financial stability between both organizations

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“This is a transformative moment in the 165 year history of Lutheran Senior Services,” Marles said. “We collectively are really excited about what this will mean for our organization moving forward and set us on a trajectory to continue our growth, continue to improve all of our services, while maintaining our our quality and and our ability to care not only for the people we serve, but also for other people providing service as employees of LSS.”

Diakon-managed communities are keeping their respective brands in the merger. The organizations expect to finalize the merger later this summer.

The announcement follows LSS’ ongoing “pivot year” in 2024, In January, LSS acquired St. Louis Home Health, which Marles said added an orthopedic specialty to the organization’s home health line and brought LSS services into Illinois. In February, LSS acquired New Horizons PACE, a Program of All-Inclusive Care for the Elderly (PACE) program in the St. Louis region.

“Home health, PACE and life plan communities all serve people in different types of ways, and we believe that diversification of services is going to be critical to our long term success,” Marles said.

Additionally, in 2022 LSS created a new strategic framework for the organization with four primary goals; culture that “brings out the best in each other,” products and services that evolve with changing consumer preferences, growth through partnership and collaboration and a sustainable financial future. This agreement, Marles said, is the core of the goals laid out by the organization.

“This deal is really a way to continue on with those strategic goals,” Marles said. “It helps us to continue to address the changing needs of our residents and our clients.”

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