Higher Ed Mergers – Sell-side

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The Change Leader's Higher Education Mergers Sell-Side Consulting Services

In today’s ever-evolving higher education ecosystem, many institutions are finding themselves in the unenviable position of having shrinking enrollments and revenues trending south. They don’t want to close their institution, but at the same time, they are realistic; they are running out of cash and find themselves caught between a rock and a hard place. Alumni want to keep their alma mater open, but the finances don’t allow for it. They must look to a larger institution as a merger partner to stay alive. 


At The Change Leader, we understand that these decisions are not merely transactions; they are transformative journeys that redefine the future of your institution and your faculty, staff, students, alumni, and the surrounding community.



Benefits of Higher Ed Mergers - Sell-Side

Good  strategic merger practices enable a higher education institution to: 

Continue to offer your educational programs to students 

Ensure the financial health and sustainability of your institution

Leverage resources and cut overhead costs through shared backend services

Find an attractive buyer that enables you to stay in business

Streamline operations, improve research opportunities, and foster a collaborative environment 

Create a new shared vision of institutional excellence across your campus

Operate with the highest integrity and ensure its institutional reputation remains excellent

Set the institutional direction and key policies, and ensure adherence to the mission

Signs Your Institution Should Consider a Sell-Side Merger

There are many telltale signs that a college merger needs to be considered. Unfortunately, many of them are things that institutions have done and/or lived with for many years, saying “this is our institutional culture / just the way we do things.” In reality, these are red flags that tell us that your institution is at risk of closing, and simply cutting programs and staff will not result in the cost savings that are need to stay in business.


Your finances are tuition-driven and are not diversified, and have resulted in revenue shortfalls due to declining enrollment


You have less than 12 months operating cash on hand and your financial situation is becoming dire


Your board members have not had the foresight needed to turnaround your finances and forestall the need for merging


Your enrollment has continued to decline over multiple years with no end in sight


Your endowment is less than your cash on hand and you have few prospects that are waiting to donate


Your institution is "one of many" geographically and does not have the value proposition needed to attract students


Your finances are not aligned to your programs, people and infrastructure, resulting in overspending


You have more faculty than needed for current enrollments and no way to reduce them without a vote of no confidence


You have excess buildings and dormitories that are a drain on cash flow because of deferred maintenance

The Three Primary Considerations

Three things university presidents on the sell-side must consider before a merger are:


  1. Cultural fit: The sell-side should consider how its own culture aligns with the acquiring institution’s. Potential clashes could impact faculty retention, student experience, and the overall success of the merger.

  2. Program integration: The sell-side needs to understand how its programs will be integrated into the larger framework of the combined institution. Will their programs be valued and supported, or are they at risk of being phased out?

  3. Financial stability: The sell-side might be motivated by financial pressures to merge, but they should ensure the deal secures their long-term financial stability and doesn’t simply burden the acquiring institution with further challenges.

Best Practices for Successful Higher Education Sell-Side Mergers

There are a number of higher education merger best practices that institutions should follow to ensure they can stay in business by being acquired by a larger institution. These include:

Higher Education Merger Sell-side Best Practices Include:

Don’t wait until your finances are dire – few if any institutions want to take on a college with excessive debt

Ensure your board is onboard with and supportive of the merger

Know the value of your institution and your assets to attract the right suitor for your institution

When picking a merger partner, do your best to pick one that is complimentary and that you align with culturally  

Engage with the board, faculty, and staff early and be as transparent as possible to mitigate resistance to change 

Do due diligence on the acquirer to determine is they are the right long term partner for your institution

Focus on ensuring that your students and student body are taken care of in every way you can

Be ready to let go of “pet projects” that don’t align with the acquiring institution’s vision

Work with accreditors and regulatory bodies to ensure your institution and programs remain in good standing

Create a strong communication plan to inform stakeholders when the time is right

How We Help Our Clients

Dr. Drumm McNaughton and our higher education merger consulting services team provide organization design, accreditation, and regulatory compliance experts who can help guide you through the Higher Ed merger process. Our consulting experts will be your guide whether you are looking for organization restructuring, culture alignment, program restructuring, and board and leadership alignment.


We’ve been there before – our partners and we have enabled multiple mergers, including both the buy- and sell-side transactions. We’ve worked with accreditation and regulatory bodies to get them to the finish line, and then merge the two institutions into one. 


We know what is needed to get you to the finish line and realize the efficiencies that will enable your institution to grow and thrive instead of just surviving (or closing). 


Our consultants have helped higher education institutions not only get back on track but create strategic plans that ensure they stay in good standing in the future when it comes to accreditation and regulatory compliance.

Higher Education Mergers (Sell-Side) Frequently Asked Questions (FAQs)


Most frequent questions about higher education mergers from the seller's side

Why do higher education institutions become acquisition targets (merge - sell-side)?

There are multiple reasons why higher education institutions decide to sell. Usually, it is an institution that has a downturn in its financial situation and wants to continue to stay in business but cannot do so without another institution’s assistance. It has assets that another institution may want. 


Another reason, although less common, is that an institution is approached by a larger institution with a better reputation because of its synergistic/complimentary programs. This institution would like to incorporate your programs into its offerings to improve its own reputation and program offerings.


How long does it take for my institution to be acquired another institution?

This depends on the complexity and business structures of the acquirer and your institution.


Once your institution has been identified as a potential acquisition target, there needs to be legal agreements put in place to complete the transaction. How quickly this is completed very much depends on the “appetite” of the two merger partners.


Additionally, there are a number of regulatory requirements that must be satisfied. These include state licensure, institutional and programmatic accreditors, the Department of Education, and NC-SARA, and other areas of compliance.


Approval from these regulatory bodies can take upward to two years, depending on the legal structures of the two institutions (e.g., for-profit or nonprofit, public or private institutions), and if the institutions are Title IV (Federal Financial Aid) eligible.


Lastly, there are the organizational design issues to be resolved that come from combining the two institutions, including:


  • Determining who will be on the governing board

  • Selecting the new president

  • Designing the new organization structure, e.g., who will be the new Provost, deans, etc.

  • What programs will be retained and what will be eliminated

  • What positions will be retained and what will be eliminated, and the terms for those released

  • What services are retained


The bottom line, it is a highly complex change and one that can take a significant amount of time. 


What are the general steps to being acquired by another higher ed institution?

Generally, there are five steps for your university or college to be acquired by another institution.

  1. Be identified or by reaching out to potential acquiring institutions. There are multiple considerations for this step, including the vision for the acquisition, institutional synergies and compatibilities, financial obligations of the acquiree, and what you want to accomplish by acquiring another institution. 

  2. Signing the LOI and conducting due diligence. Once a potential acquirer has been determined and the boards of the two institutions are in agreement, a letter of intent is generally signed. This enables you as the acquiree to do your due diligence to ensure that everything the acquirer says is correct, as well as determine if this is your “forever home” for your faculty, staff, and alumni.

  3. Contact your regulatory bodies. Higher Ed mergers are significantly more complex due to the various federal, state, and accreditation compliance and regulatory bodies that oversee institutions. Each of these has its own regulatory standards that must be met. 

  4. Closing the deal. This is probably the most anti-climatic of all the steps in a typical acquisition. The two institutions sign the agreement and exchange whatever the terms of the agreement say. 

  5. Post-merger restructuring. This may be the most complex of all of the five steps in that major organizational changes must be made. This is one of the main areas in which The Change Leader assists institutions with their mergers.


What services does The Change Leader provide for mergers (sell-side)?

Higher education acquisitions can be very complex, especially when dealing with the regulatory and accreditation bodies and post-merger restructuring. The Change Leader leads the way in providing the necessary tools and expertise to help you understand the path forward, as well as assisting in the post-merger integration of and change management efforts.


Whether it be developing your new org chart, determining which programs to keep and which to teach out, combining staff and eliminating overhead, or navigating the myriad regulatory bodies, The Change Leader’s team of higher ed experts can help you get to the other side of a merger so you realize the efficiencies and expertise that drove you to the acquisition in the first place. 


Do you have questions or want to better understand how you can use the acquisition of another institution to drive enrollment growth and institutional reputation? Contact us for a free 60-minute consultation.


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