Law firm VWV partner Siân Champkin analyses the latest merger activity in the independent sector

Trends in the education transactions world are continuing to accord with the earlier months of the year, with senior/prep school mergers being the leading deal type.

The consolidation of the sector shows no signs of slowing and indeed appears to be picking up pace with emerging charitable schools groups such as Mill Hill Education Group continuing to gain in scale and market share. Other notable charitable schools have taken their first steps into a group structure and we expect to see many more added to this category in the coming months.

The commercial acquirers, such as Inspired Learning Group, are also continuing to acquire charitable assets with two further recent acquisitions in the form of Derby Grammar School and Shebbear College in Devon.

We have witnessed some interesting charitable mergers in the first half of the year such as the Sherborne Schools Group merger bringing together two senior schools and two prep schools into an enlarged group. This to an extent (although of course there are other examples) is outside of the ‘norm’ of senior to prep mergers but is something we are increasingly expecting to see with a group-focused strategy featuring highly on a number of governing boards.

It’s clear from statistics that enrolment into larger schools and at older age ranges is holding up better (with exceptions) and as such market share is ever-increasing for those schools in such categories.

The commercial groups, particularly those with a previously international focus, are still actively pursuing opportunities and we expect to see a number of notable schools making strategic moves to strengthen their position in the market by seeking the support of a larger organisation in meeting their strategic aims and investment ambitions.

Having acted for private school Kingshott on its recent merger with Mill Hill (and previous schools that have joined the Mill Hill Education Group) it was interesting to examine the reasons behind a merger of this nature. Kingshott’s headmaster David Weston said: “Our decision to join forces with a charitable foundation, the Mill Hill Education Group, was a proactive initiative that enables us to action our ambitious goals over the years ahead. It was a future-facing decision taken during a time of strength, and we are excited to be able to benefit from all the enrichments, enhancements and efficiencies that being part of the Mill Hill Education Group offers. We are looking forward to working collaboratively with colleagues across the group over the years ahead to establish opportunities to further enrich and enhance Kingshott’s excellent education for all our current and future pupils.”

This article was written before the result of the general election was known and, depending on the result, there may be further challenges and pressures ahead for some schools. As such it may be that we see more schools reach a state of distress and needing opportunities to explore. While we will work hard with them and pride ourselves on finding solutions to these difficulties, we are always urging conversations to be undertaken at a sufficiently early stage to allow the greatest range of options to be considered.

Some recent transaction highlights:

• Kingshott School: merger with Mill Hill School.
• Sherborne Girls School: merger with Sherborne School.
• St Albans High School for Girls: merger with Stormont School.
  

  Siân Champkin