Hi, I'm a college student in Philadelphia, I saw that a large school in the area, Drexel University has been acquiring other Universities in the area with the latest being Salus University in Elkins Park. The Uni said more Acquisitions are on the horizon. I'm sure with declining enrollments across the Us its not just a Philadelphia-specific trend. I can't ever find advisors behind these transactions or too much detail, so I figured someone here may have some insight. What do these transactions look like and in what ways are they different from company acquisitions? And what bank/coverage groups cover these kinds of transactions?
Trending Content - Investment Banking Forum
| +66 | Any tips for sleeping well? | 36 | 1h |
| +49 | Wealthy Parents / Jaded | 13 | 8h |
| +40 | Background check issue IB Full Time | 21 | 7h |
| +36 | Venezuela Debt Restructuring - LAZ vs CVP | 12 | 11m |
| +34 | How are hours rn for SA (interns) | 18 | 9h |
| +28 | Q dealflow slowdown | 22 | 2d |
| +25 | HL vs WB | 19 | 12h |
| +23 | UBS GIG, LevFin, FSG Interns working Sundays and 85 hour weeks their first week? | 11 | 12h |
| +23 | Investment Banking in Mexico | 5 | 5h |
| +22 | MM bottom bucket bonus | 9 | 10h |
Career Resources
Universities doing M&A with other universities is part of what Public Finance groups do. Non-profit universities (which excludes for-profit institutions) can issue tax-exempt debt, and generally have no equity component in their capital structure like a corporation does. This makes them similar to U.S. state and local governments, which are covered by Public Finance groups, so most investment banks that are active in Public Finance also have a sub-group that focuses on Higher Education. It is a very niche sector, but the client base is all of the non-profit universities in the U.S., whether it be private institutions like Drexel or UPenn, or public like Penn State or the University of Texas. They all issue debt and need access to fixed-income capital markets like corporations do, so Public Finance investment bankers cover their needs. They also do M&A between universities in the rare situations that require it.
Not all investment banks have a Public Finance group. It's generally just the bulge bracket firms and middle market banks that have lots of capital. Firms like Morgan Stanley, RBC, Piper, J.P. Morgan, etc.
Higher Ed M&A has increased recently and is expected to continue ahead of the expected enrollment cliff in ~2025. You mentioned Drexel, but I am also aware of Villanova in the Phili area taking part in this trend. Depending on the deal type I've heard Higher Education Public Finance Bankers from BBs work on this stuff, with smaller/niche banks also pitching in.
The biggest deal in this space is between the University of Phoenix and the University of Idaho. I believe Tyton Partners and Citi have been involved with the deal. There has been plenty of news coverage on this deal, so it should be fairly easy to read about.
There is also a good article on Higher Education M&A from McKinsey here: https://www.mckinsey.com/industries/education/our-insights/higher-ed-is…
In doloremque ipsum aliquam dolor aut quam voluptatibus. Nihil quidem id et. Magnam natus nesciunt ratione eos.
Distinctio nemo beatae dolorem ea alias. Cumque nam quia et ducimus. Qui itaque ab occaecati excepturi quia aperiam.
Eligendi quis eius quis tempora quia doloremque. Exercitationem incidunt reiciendis sed voluptas et assumenda. Porro tempore reiciendis sed. Animi aut fugiat facere quos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...