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Mastering M&As

December 2019

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An excerpt from a recent NACUBO book helps you understand potential challenges inherent in conjoining the programs and people from merging institutions.

The recently published book Winning Combinations: A Guide to Mergers and Acquisitions in Higher Education (NACUBO, 2019) offers readers insights into a new intersection for higher education. Written for both institutions considering their next big strategic move as well as for those wondering how they’ll keep the lights on 10 years from now, this book taps into the collective experience of more than a dozen leaders in higher education who have initiated, observed, facilitated, participated in, contributed to, and analyzed all types of mergers, acquisitions, and consolidations.

In the following excerpted chapter, “Resolving Sticky Issues,” leaders from several institutions of higher education offer real-life examples of some of the challenges that can arise as two institutions attempt to reconcile their missions, their leadership and faculty, and the commitments they’ve made to their students. These insights from fellow leaders into the strategies and approaches used to overcome barriers to success can better prepare CBOs who may be considering a merger or acquisition for their own institution.

Countless potential mergers never move past the casual conversation stage because the two presidents involved don’t see an obviously strong strategic match. Others get off to a flying start only to become bogged down during the initial phase of due diligence. “In my experience, if you can’t get to a letter of intent in six to eight months, the deal will probably fall apart,” says Anne Ogilby of Ropes & Gray, LLP.

Determining who would fill various leadership roles is one obvious barrier to continued discussions, particularly if the two institutions are similar in size and financial strength. “From the deans or even department chairs, up to vice presidents and presidents, a merged institution doesn’t need two of everything,” says Rick Staisloff of rpk GROUP. “Early on the two institutions don’t have to figure out 100 percent of what will happen with institutional leadership, but there has to be a willingness to engage in the conversation.” Assess, for example, which president, dean, or cabinet member is closer to retirement, more predisposed to stepping down, or willing to take a different role. Staisloff adds, “If the joint leadership can’t agree on a vision of leadership in the merged organization, there’s no sense doing any financial analysis or further due diligence.”

Here are other issues that often arise during merger discussions, along with examples of how institutions have worked through them.

Student Placement

A merger often means finding a new academic home for some or all students; even when a physical campus is retained, it may be repurposed for other academic programs or institutional needs. Wheelock College faced the former situation. For every one of the 588 students who would be affected by its 2018 merger with Boston University (BU), Wheelock and BU developed an individual academic plan. Program directors from both institutions worked out a general plan, mapping program to program. Then, an advisor from BU met with each Wheelock student to review an individualized plan for program completion.

“One of the really tough issues was that BU did not offer all of Wheelock’s undergraduate programs,” says David Chard, Wheelock’s former president. “As the parent organization, BU had to find another institution in the Boston area that offered the missing program and would takeour students at the same tuition point.”Students enrolled in Wheelock’s bachelor of social work program, for example, had the option of enrolling at Simmons College—except for the men because Simmons is an all-women’s college. In the end, all six of the men in Wheelock’s social work program chose to change their majors and attend BU.

Another potential issue involves the application of credits already earned by students when both institutions offer the same degree program. In some situations, the absorbing institution may need to exercise flexibility on curricular issues to ensure students are held harmless.

Tuition and Financial Aid

Merging institutions typically request that the partner institution honor existing financial aid packages and tuition levels for a certain period of time. This ensures that students aren’t financially penalized by incurring greater education costs as a result of the merger. Boston University, for instance, honored Wheelock’s financial aid and tuition levels at both the graduate and undergraduate levels.


For Berklee College of Music and the Boston Conservatory, governance was a major point of merger negotiations. Berklee expanded its board to include eight former trustees of the conservatory, for up to nine years. The two board chairs selected the new board members. The trustees then created a new board committee, populated with an equal number of trustees from both schools, to oversee the conservatory’s strategic development and preserve its mission.

“We wanted to be forward looking and, at the board level, ensure attention was being paid to development of the conservatory the way we all hoped,” explains Berklee’s Richard Hisey. Post-merger, the president of the conservatory stayed for one transitional year before retiring. Berklee then involved a number of legacy trustees on the search committee that selected the conservatory’s new executive director.

When Kaplan University was acquired by Purdue University, its president became chancellor of the renamed Purdue Global. The chancellor reports to Purdue’s president and Purdue Global’s six-member board of trustees (five of whom also serve as Purdue University trustees).

Faculty Employment and Tenure

Tenure is a hard-earned privilege that, understandably, faculty members are reluctant to give up. Promising continued tenure at a newly merged institution, however, can be problematic because faculty make tenure decisions based on institutional criteria; the criteria used at one university rarely match the requirements that apply at another university.

Boston University addressed this issue by offering permanent employment and a modified clinical title to all tenured faculty at Wheelock College. “Professors at Wheelock became clinical professors at BU, all in programs related to their expertise, and in many cases they also took on additional administrative roles,” David Chard says.

Internal disagreements may arise over the M&A strategy or process a college or university employs or the institutional structure that results after the transaction occurs. After Purdue announced its intention to acquire Kaplan University, for example, approximately 10 percent of its tenured or tenure-track faculty and 6 percent of all faculty and lecturers signed a petition to challenge the acquisition. Purdue, which had anticipated some resistance, held open sessions with faculty to share details of the transaction, address questions, and discuss opportunities for future collaboration. Senior leadership continually reiterated the acquisition’s benefits, says William Sullivan, Purdue’s treasurer and chief financial officer: “The acquisition was visionary and strategic to enable Purdue University to gain competency, scale, and delivery of online programs while positioning the university to meet its modern-day land-grant mission of serving adult learners.”

Staff Employment

Both Berklee College of Music and Purdue University experienced some pushback from employees after announcing an M&A transaction. The concerns typically related to fear about not having enough resources to continue delivering a high-quality education to students and about the prospect of layoffs. With the acquisition of Kaplan University, for example, Purdue took on 15 physical campuses, 3,000 employees, and 30,000 more students. In its announcement of the acquisition, Purdue emphasized that no state appropriations would be directed to Purdue Global, which remains distinct from other campuses in the university’s system and relies on tuition and fundraising to cover operating expenses.

Purchasing Kaplan also offered the university the opportunity to provide a new benefit to its existing employees; none was affected by the acquisition. All employees receive free tuition to attend Purdue Global. “What’s interesting is how many of our own people had started school but couldn’t afford to finish. They’re excited to be able to get a Purdue Global degree and fulfill a lifelong dream,” says Sullivan. About 600 administrative and clerical employees have enrolled in the online program to complete their bachelor’s degree or pursue a master’s degree.

Staff reductions inevitably occur when two administrative structures meld into one. A new administrative structure aiming for efficiencies won’t accommodate everyone, nor will everyone wish to stay as their positions, responsibilities, and supervisors change. At the least, both institutions should commit to helping employees find new opportunities either at the merged institution or elsewhere. Key employees can be offered retention contracts, which provide financial incentives to stay until the merger occurs and possibly afterward for a defined amount of time.

Nearly 40 percent of Wheelock College’s employees, including some contract faculty members, needed to find new employment after the merger with Boston University was finalized. Eventually, BU hired all of Wheelock’s facilities crew at increased pay and interviewed many other employees for professional staff positions. Those who were not hired by BU after the merger received a graduated severance package that was more generous than either school had ever offered on its own.


Often, the big question for the merging entity is how much flexibility and support it will have to continue its mission. Some investments may need to be designated for supporting growth of a new college or unit after the merger occurs.

Both Berklee and the Boston Conservatory had capital campaigns in full swing as they explored a merger. Institutional advancement personnel from both schools reached out to donors together, carrying the message that larger contributions would enable the conservatory to grow and do more once it was part of Berklee. The schools also put a lot of thought into how they’d merge their endowments. Berklee had the larger endowment, with a well-established investment process managed internally and supported by an external consultant. The conservatory relied more heavily on an external consultant and model, which favored a more passive, index-based approach to the endowment. “Because we managed our endowments so differently, it made the most sense to merge the conservatory endowment into Berklee’s for investment management purposes. We orchestrated the combination of the endowments to coincide with the actual closing date of the merger transaction,” says Hisey.

Wheelock’s endowment was coming off its two best years of performance when its merger with BU was underway. The two institutions agreed that Wheelock would place all proceeds from the sale of its president’s house and a residence hall into its unrestricted endowment. BU used Wheelock’s operational funds to cover severance costs for employees losing their positions, then reimbursed Wheelock’s endowment for the same amount. That enabled the new Wheelock College of Education and Human Development, an academic unit of BU, to start with a $63 million endowment. “Very few education schools have that level of endowment, so that’s a positive outcome. And a portion of the endowment is unrestricted, so the dean and provost will work together to decide how the unrestricted interest yield is deployed,” says David Chard.


Sports can be a surprisingly emotional issue, particularly when students have enrolled in a smaller institution for the purpose of playing varsity sports. Unlike Boston University and its NCAA Division I athletes, Wheelock College had a Division III athletic program. To assist students who wanted to continue competing at the varsity level but had little chance of making BU’s teams, Wheelock hosted several athletic fairs. The well-attended fairs enabled other Division III institutions to recruit some Wheelock student athletes.

Alumni Reaction

A negative response from alumni may not completely derail a proposed merger or acquisition, but it can complicate an already complex situation and require special efforts from institutional leadership. It’s also a reaction that should be anticipated; hearing that their institution is losing its identity or changing significantly—perhaps even merging with a cross-town or long-time rival—can leave alumni feeling betrayed, abandoned, or adrift. They typically look for someone to blame, whether it’s the president, the chief business officer, the governing board, or all of the above.

All nine of the consolidations undertaken by the University System of Georgia prompted pushback from unhappy alumni—particularly those holding diplomas from schools that weren’t physically closing but still being renamed, rebranded, and restructured. “Once alumni get over the initial shock and anger, they can see the positive things happening with the students and move beyond the fact that the name is no longer there but the educational activity and the spirit of the institution still remain,” says Shelley Nickel of the University System of Georgia. “It helps to reassure alumni that some traditions will remain in place and they’ll always be welcomed back to campus because they are also part of the new institution.”

When Georgia consolidated Southern Polytechnic University into Kennesaw State University, for example, the operational working group on preserving traditions and history recommended combining the two institutions’ archives and special collections to form a unified history. Information on both universities’ histories was posted on Kennesaw’s new website, and streets were renamed on the former campus of Southern Polytechnic to honor portions of its legacy.

Wheelock College’s merger with Boston University revealed an interesting divide among alumni based on their ages. Classes from the 1970s through the 1990s were vocal critics of the merger. Graduates from the 1940s and 1950s supported the move, as did those who graduated after 2000. “Our young alumni believe Wheelock’s association with BU will only make them look better, and they now have BU alumni affiliate status, which gives them access to services such as job support and local gym membership,” says David Chard.

BU alumni and some current students expressed opposition as well, publicly questioning how Wheelock students could earn a BU degree without paying BU tuition or meeting its academic standards. “It got a bit ugly at the student level, but BU at the institutional level was always welcoming,” Chard adds. A few months before the merger became final, BU hosted a special red-carpet event to welcome all incoming Wheelock students and their parents into the BU community.

Thunderbird School of Global Management already had an active antimerger alumni group when Arizona State University (ASU) entered the picture in 2014. The Thunderbird Independent Alumni Association had formed in response to an earlier merger proposal, which was not approved by accreditors, and its member T-Birds were understandably skeptical about ASU’s intentions. “We were very mindful of the reaction of the alumni, especially as regards future philanthropy,” says Lisa Frace, who was ASU’s chief budgeting officer at the time. “The ASU president and the new Thunderbird dean met with numerous groups of alumni, to make sure we were addressing their concerns as much as possible.” Much of the faculty was retained after the merger, and the Thunderbird School and brand live on as an academic college within ASU and an executive education program with a global presence.


“A merger positioned and perceived as a win can have a positive effect on giving,” observes Brian Mitchell of Academic Innovators. “People will give to an institution that no longer exists if they believe the merged institution proves to be a stronger place, one of which they can be proud. They will give to winners.”

Within the first six months of its existence, for example, Boston University’s Wheelock College of Education and Human Development experienced a surge in financial commitments for graduate scholarships, teaching innovations, and faculty support. In addition, several former donors to the former Wheelock College transitioned their planned gifts to the new college at BU.

After its merger with the Boston Conservatory, Berklee College of Music’s fundraising universe expanded to attract interest across the performing arts (music, dance, theater) rather than just in music. A capital campaign Berklee began before and concluded after the merger proved successful: When a half year still remained in the campaign, Berklee was already 28 percent ahead of its $100 million target. Pre-merger, the Boston Conservatory also had a campaign in progress, in support of a new building. “That campaign was also successful, although we have altered the endowment focus to current giving to support scholarships. We now have an annual conservatory fundraising event that appeals to a larger universe of donors,” reports Richard Hisey. “Overall, fundraising for the combined institution is quite healthy.”

Reaching a Resolution

Here are some recommendations to keep in mind when two institutions are in the midst of due diligence and working to resolve their differences.

Remember the reason. All the long hours, late nights, and seemingly endless meetings associated with a merger or acquisition happen because of students. Reminding campus constituents of the ultimate objective—to provide better educational opportunities for students—can help ease some of the anxiety that inevitably accompanies change. Whenever possible, share data points that illustrate how the merger or acquisition will help students, such as by increasing retention rates, reducing time to graduation, expanding academic programs, and so forth.

What would be the right thing to do for our students, to enable them to matriculate and graduate easier? “Asking that question made decision making a little bit easier when we were dealing with a sticky issue during a consolidation,” says Shelley Nickel. “When you see an issue through the eyes of a student, you’re more likely to come up with something new rather than doing what you’ve always done in the past.”

Choose leaders carefully. “Make sure you have the appropriate people leading the implementation process, because they are the ones who set the tone. If you have a leader in one of the institutions who is not really in favor of the change and may even try to undermine it, you will have problems,” observes Nickel. “Change is very difficult and people often can’t see the value add, which is usually a few years down the road.”

Leaders, for example, need the ability to communicate the transaction’s purpose and promise but also manage expectations during months of merger-related work that can be tedious, resource intensive, and fraught with emotion. Realizing the returns for the campus community will take time, as will dealing with the sense of loss that often accompanies any significant change.

Avoid an “I win, you lose” mindset. “It’s natural for the acquiring institution to talk about how much it can do for the smaller or target institution—but, over time, that mindset could lead stakeholders to see the merger only as a one-way street,” says Hisey. As an antidote, board members and senior leadership should consciously and regularly focus on how the merger fulfills both institutions’ priorities. The smaller institution, for example, might not be able to contribute much from a financial standpoint but could provide the acquiring institution with new courses of study or highly distinguished faculty members. In particular, the person facilitating meetings of the joint implementation committee needs to ensure the voices of both institutions are being heard.

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