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Author Topic: College Mergers  (Read 1256 times)

Herman Cain

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College Mergers
« on: July 23, 2022, 02:29:19 PM »
There is not only conference realignment going on, there are also some very interesting Acquisitions of Colleges going on.

Northeastern University just acquired Mills College in Oakland. Northeastern assumed Mills liabilities of $21 million agreed to invest $30 million to continue certain gender studies etc at Mills. In return Northeastern  gets land that some value at $1 billion, an endowment of $191 million and now have  foothold on the west coast.  The Mills alumni are all up in arms over the deal.

Northeastern put together a team to study deals all over the country.  So probably more deals on the way. 

I wonder if  MU can find some good acquisitions and build its footprint?



https://www.nasdaq.com/articles/colleges-emerge-as-hot-market-for-mergers-and-acquisitions
Winning is overrated. The only time it is really important is in surgery and war.
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The Sultan of Semantics

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Re: College Mergers
« Reply #1 on: July 23, 2022, 07:38:37 PM »
The problem is that the colleges they would be looking for are ones with decent sized assets, but ones that aren’t cash flowing well. Not sure how many fit that criteria but also fit that mission. A lot of Catholic schools are poorly endowed but also are beholden to their sponsoring orders. 
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

dgies9156

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Re: College Mergers
« Reply #2 on: July 23, 2022, 10:19:06 PM »
The problem is that most merger candidates are losing money and have borrowed to their eyeballs to stay afloat.

I looked at one a few years back as part of a bank merger and the only thing that kept the college alive was a civic minded bank that counted on the fact that either the Diocese would bail it out or the land would serve as adequate collateral.

When St. Joseph High closed in Westchester, it was the land that made the banks whole. You either bail the college our or you are the bad guy and liquidate it. Neither is attractive.

Not to mention Marquette has enough challenge keeping what is has running smoothly.

Scoop Snoop

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Re: College Mergers
« Reply #3 on: July 24, 2022, 08:37:45 AM »
I think Marquette should buy Gonzaga so we can increase our chances of another natty in my lifetime. OK, I've had my fun....

 Sweet Briar College in Amherst Va. almost closed in 2015 but was rescued by wealthy alumnae. There were about 800 students in the then "women only" college 20 years ago, but they now show an enrollment of 336 including 9-10 males. It's only one example of a small (OK, very small) college that is determined to keep the doors open. The college was founded in 1901 and no part of the 2.840-acre campus can be sold off as the founder prohibited the sale of any part of the campus ever. I could see large tracts of land offered with a 99-year lease to allow for the building of a retirement community of McMansions, but for now the college is hanging on tenaciously.

As dgies has said, the value of failing colleges is almost entirely in the land. The buildings of a small college are of often of a much lesser value and may be quite dated, needing extensive and costly renovations. 

Edit: With failing colleges, it comes down to the emotions and memories of alumni vs. the realities of economics. Think of economics in this case as simply another way of saying "arithmetic". Alumni often turn a blind eye to reality. Just as Kodak's film business is only a sliver of what it once was, failing colleges are doomed unless they can come up with a creative, dramatic plan to reverse their fortunes.
« Last Edit: July 24, 2022, 09:54:28 AM by Scoop Snoop »
Wild horses couldn't drag me into either political party, but for very different reasons.

The Sultan of Semantics

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Re: College Mergers
« Reply #4 on: July 24, 2022, 09:21:57 AM »
I said at the beginning of the pandemic, that I thought two Wisconsin colleges would not be open come Fall of '21. It turned out only one (Holy Family, formerly Silver Lake) closed because federal Covid dollars helped balance sheets in a couple of cases. I wouldn't be surprised to see another couple close in the next generation or so because the demographics are bad, and their financial models aren't viable. I know of a private school in Wisconsin that routinely discounts their students under the public universities and STILL has enrollment issues.

I look at schools like that, and like Sweet Briar, and wonder "what's the point?" It just seems like these places are throwing good money after bad at this juncture.
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

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Re: College Mergers
« Reply #5 on: July 24, 2022, 09:27:01 AM »
What can Lovell get for the MU campus? Move the university to Mequon where it’s safe.

JWags85

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Re: College Mergers
« Reply #6 on: July 24, 2022, 12:50:13 PM »
I look at schools like that, and like Sweet Briar, and wonder "what's the point?" It just seems like these places are throwing good money after bad at this juncture.

353 students.  I mean my god.  What are you ever gonna be able to do in order to sort yourself out

Scoop Snoop

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Re: College Mergers
« Reply #7 on: July 24, 2022, 01:30:55 PM »
353 students.  I mean my god.  What are you ever gonna be able to do in order to sort yourself out

Alumnae came up with a whopping, mind boggling 25.6 million in donations to keep the school open in 2015. To them, obviously the school was/is important enough to justify huge subsidies but...how long can this go on?

My wife and I attended a concert at SB shortly after the plan to shut down was announced. The audience was about half students. At the end of the concert, the MC thanked everyone for coming and remarked that this would be the last SB concert in the building. Students spontaneously started to stand up to speak about their feelings, some with bitterness but many in tears or sobbing. The planned closing was done in secret by the board and sprung on to students, faculty and alumnae. They had brought in a male president-I think the first one ever-whose mission was to shut it down. The entire fiasco could not possibly have been handled worse!

I agree that it does not make sense at all, but if the alumnae are that dedicated and believe in the school that deeply, I wish them luck.

In his pre politics days, then 37-year-old Nebraska Senator Ben Sasse was brought into Midland University as a last-ditch attempt to keep the doors open. Somehow, he turned the Lutheran school around and saved it from closing. To some people, it was worth it.
Wild horses couldn't drag me into either political party, but for very different reasons.

Herman Cain

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Re: College Mergers
« Reply #8 on: July 24, 2022, 04:04:03 PM »
The problem is that the colleges they would be looking for are ones with decent sized assets, but ones that aren’t cash flowing well. Not sure how many fit that criteria but also fit that mission. A lot of Catholic schools are poorly endowed but also are beholden to their sponsoring orders.

f the 2.840-acre campus can be sold off as the founder prohibited the sale of any part of the campus ever.
As dgies has said, the value of failing colleges is almost entirely in the land. The buildings of a small college are of often of a much lesser value and may be quite dated, needing extensive and costly renovations. 

Edit: With failing colleges, it comes down to the emotions and memories of alumni vs. the realities of economics. Think of economics in this case as simply another way of saying "arithmetic". Alumni often turn a blind eye to reality. Just as Kodak's film business is only a sliver of what it once was, failing colleges are doomed unless they can come up with a creative, dramatic plan to reverse their fortunes.
One of the better  college deals recently was Iona's acquisition of Concordia College- New York. Concordia was nearby and sitting on highly valuable land, however they could not attract enough students to stay above water. Unlike some other small schools, The Lutherans (who run the Concordia System) and their  Benefactors actually had nice new buildings , athletic facilities and everything was well maintained.

Simultaneous with the merger, New York Presbyterian agreed to fund $20 million to create the Iona School of Health Sciences at the newly acquired facility.

Iona recently renamed themselves Iona University .  Enrollment is up to nearly 4,000 students . Seamus Carey, Iona President , is a man on the move.
Winning is overrated. The only time it is really important is in surgery and war.
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JWags85

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Re: College Mergers
« Reply #9 on: July 24, 2022, 04:23:05 PM »
Alumnae came up with a whopping, mind boggling 25.6 million in donations to keep the school open in 2015. To them, obviously the school was/is important enough to justify huge subsidies but...how long can this go on?


Well, its mind boggling until you think about it.  Tiny private school in Virginia, whose founder was insistent on a school for WHITE women, it has a very renowned equestrian program/team (a sport that is usually reserved for substantially moneyed individuals), and an early adopter of study abroad...you realize its basically been a destination for rich heiress types for most of its existence.  Thats definitely the pool of alumnae who can round of $25MM in a hurry.

But it definitely just seems like a band-aid on a slashed artery.

ATL MU Warrior

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Re: College Mergers
« Reply #10 on: July 24, 2022, 04:55:02 PM »
Alumnae came up with a whopping, mind boggling 25.6 million in donations to keep the school open in 2015. To them, obviously the school was/is important enough to justify huge subsidies but...how long can this go on?

My wife and I attended a concert at SB shortly after the plan to shut down was announced. The audience was about half students. At the end of the concert, the MC thanked everyone for coming and remarked that this would be the last SB concert in the building. Students spontaneously started to stand up to speak about their feelings, some with bitterness but many in tears or sobbing. The planned closing was done in secret by the board and sprung on to students, faculty and alumnae. They had brought in a male president-I think the first one ever-whose mission was to shut it down. The entire fiasco could not possibly have been handled worse!

I agree that it does not make sense at all, but if the alumnae are that dedicated and believe in the school that deeply, I wish them luck.

In his pre politics days, then 37-year-old Nebraska Senator Ben Sasse was brought into Midland University as a last-ditch attempt to keep the doors open. Somehow, he turned the Lutheran school around and saved it from closing. To some people, it was worth it.
I grew up in the same town where Midland Lutheran College is. This is the first I’ve ever heard that the school was about to close. Not saying you are wrong, but curious where you got that info.

The Sultan of Semantics

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Re: College Mergers
« Reply #11 on: July 24, 2022, 05:17:16 PM »
I grew up in the same town where Midland Lutheran College is. This is the first I’ve ever heard that the school was about to close. Not saying you are wrong, but curious where you got that info.

I'm not sure if it was "about to close," but it certainly was in terrible financial shape. Dana College closing was a lifeline, but they had some real good leadership after that to solidify its survival.
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

Scoop Snoop

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Re: College Mergers
« Reply #12 on: July 24, 2022, 05:20:15 PM »
I grew up in the same town where Midland Lutheran College is. This is the first I’ve ever heard that the school was about to close. Not saying you are wrong, but curious where you got that info.

I tried to find sources on the net but was blocked by paywalls. I clearly remember reading about it though.
Wild horses couldn't drag me into either political party, but for very different reasons.

Scoop Snoop

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Re: College Mergers
« Reply #13 on: July 24, 2022, 05:38:40 PM »
Well, its mind boggling until you think about it.  Tiny private school in Virginia, whose founder was insistent on a school for WHITE women, it has a very renowned equestrian program/team (a sport that is usually reserved for substantially moneyed individuals), and an early adopter of study abroad...you realize its basically been a destination for rich heiress types for most of its existence.  Thats definitely the pool of alumnae who can round of $25MM in a hurry.

But it definitely just seems like a band-aid on a slashed artery.

Fair enough, although for many years the "rich heiress type" has been largely replaced with students coming from families that are not super wealthy. I know local girls who have gone to SB and their families are far from wealthy. One currently there may inherit 1/4 of a modest sized herd of cattle.  That still leaves room for some aging monied alumnae. As I asked....for how long (can this go on)? So far it has lasted 7 years but I agree that the numbers simply cannot work in the long run.

« Last Edit: July 25, 2022, 06:37:06 AM by Scoop Snoop »
Wild horses couldn't drag me into either political party, but for very different reasons.

dgies9156

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Re: College Mergers
« Reply #14 on: July 25, 2022, 10:20:55 AM »
One of the better  college deals recently was Iona's acquisition of Concordia College- New York. Concordia was nearby and sitting on highly valuable land.

This is exactly the issue!!!!

Herm, you did it again!

The land that many of these colleges rest on has extreme value, If there's only 400 students in a college build for 4,000 or more, the land is underutilized. While it can secure a substantial debt load, liquidation of collateral is a secondary or tertiary source of repayment.

In Marquette's case, using precious resources to acquire another college that's failing is scarey. There's a huge challenge facing Marquette just remaining the great institution it is without trying to rehab another college.

Win a Natty first, OK!

The Sultan of Semantics

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Re: College Mergers
« Reply #15 on: July 25, 2022, 10:53:07 AM »
I look at all the land Mount Mary sits on, right on the Menomonee River Parkway, and wonder how many developers must have approached the University about using some of that land to help with their financial issues.
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

PBRme

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Re: College Mergers
« Reply #16 on: July 25, 2022, 11:16:33 AM »
Didn't the sisters just sell that huge parcel in downtown Elm Grove

That must have been worth something
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The Sultan of Semantics

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Re: College Mergers
« Reply #17 on: July 25, 2022, 11:23:37 AM »
Didn't the sisters just sell that huge parcel in downtown Elm Grove

That must have been worth something

Yeah and they built housing on campus with at least part of the proceeds.

https://trinitywoods.com/
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

 

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