A Strategic Solution for the Future of Higher Education from a Mergers and Acquisitions Perspective

In today’s reality, higher education institutions (HEIs) are facing unprecedented challenges, owing to substantial causes such as the rising overhead expenses for a physical college or university, increased fiscal and enrollment uncertainty as a result of the COVID-19 pandemic, new academic pathways (e.g. certificate programs), and technological innovation. The aforementioned factors have led HEIs to suffer a student demographic fluctuation, increased financial restrictions, and cash flow problems. Executives and boards of trustees who are going through a rough patch now face the reality that their institution has an uncertain future and, as a result, they should take the necessary actions to assist them to overcome the impending challenges and threats in order to keep their institutions solvent.

 

Visionary and motivated leaders do more than hope to keep their heads above water. They seek strategies to navigate the coming waves or enhance their position if they are already on the right track. Mergers and acquisitions are a popular strategy today adopted by many academic leaders after they have recognized that these rough patches are threatening the viability of their institutions.

 

Why Higher Education is Turning to Mergers

As colleges and universities have been facing rising financial turmoil, the prospect of mergers and acquisitions (M&A) has intensified. According to a recent report, worldwide M&A activity in the higher education sector grew by 46% in 2019. With the commencement of the COVID-19 pandemic in 2020, it is only reasonable that such behavior will escalate even the more. The environmental turbulence and increasingly challenging and competitive global market has been the significant driver of institutional mergers, and have become a vital strategy for many HEIs.

 

Academic leaders have viewed mergers and acquisitions as a rich and powerful savior for their institutions because the strategy has demonstrated that:

 

● It ensures continued growth, enhanced efficiency, wider economies of scale, higher value (for both clients and shareholders), and increased overall competitiveness.

 

● Mergers can help colleges and universities cut expenses, integrate services, expand program offerings, and enhance marketing and brand exposure.

 

● Academic executives and leaders have also perceived a merger or acquisition as a chance to increase enrollments, acquire a new platform, expand geographically, or otherwise progress their mission.

 

● Dramatically and profoundly increase student, faculty, and community service, quality, breadth, and value

 ● Long-term viability and efficacy of the institution.

 

 

 

Bottom Line

In this new era of higher education, with its unprecedented challenges, it is to the advantage of academic leaders to maintain and be motivated by the belief system that “bigger is better.” The time has come for these leaders to recognize how an active mergers and acquisitions strategy can be an advantageous strategy for any institution.

 

 

In the upcoming future, with the academic landscape still in a state of uneven trajectory, with no real end in sight of there being a turnaround in higher education institutions undergoing unparalleled upheaval and challenges, it is becoming more obvious that mergers and acquisitions will emerge in the coming years as the foremost solution in higher education. This new future of higher education is coming at a time when surviving and prospering in the higher education field will be on the backs of future M&A rivalries. Rivalries that will come into play as more and more institutions seek to fine-tune their systems, procedures, and cost structure. It is with this potential future in mind that should compel academic leaders to embrace M&A strategy as early as possible in order for the institutions to avoid M&A contests while simultaneously reaping the benefits of mergers early on.

 

 

If your institution is ready to embrace a great beginning by adopting a mergers and acquisitions strategy, the HWA Alliance of CPA Firms will walk you through the complex world of mergers and acquisitions. The stakes are really high in the process. Time is of the essence too. A good sense of judgment and competent assistance is required. Having fast access to the whole M&A strategy’s resources, as well as skilled expertise entirely focused on transaction advice, can make all the difference.

 

Our M&A Advisory solutions will undoubtedly guide colleges, universities, and other organizations that intend to buy, sell or restructure their institutions. Just as personal financial advisors conduct individuals and small businesses, our expertise in M&A transactions can help achieve a seamless, efficient, and successful transition while matching institutions with the right purchasers. With our help, you can achieve the growth and success that your institution needs! 

 

 

John R Wright 

 

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