“Who will be your merger captain?” That is the question I was asked by the head of mergers and acquisitions of a major bank when we met to talk through what colleges could learn from commercial mergers. As it turned out, the captain for the merger of Hackney Community College would be me.
In January 2015, the governors agreed that it was unlikely that we could continue to remain financially healthy and deliver our mission as an independent college. They asked me, as principal, to undertake a review of strategic options.
In the subsequent 12 months, we examined a wide range of possibilities, including establishing links with further education, higher education, academies and the private sector. We selected an FE-to-FE merger as our preferred option and, after evaluating a couple of alternatives, we and our neighbours, Tower Hamlets College, agreed to such an alliance.
It was at this point that I asked one of our governors, who worked for a European bank, if I could see what lessons the team there might be able to give to colleges, having advised thousands of businesses going through mergers and takeovers.
They emphasised the importance of having a very clear merger implementation plan, and asked me about our “merger captain”.
In discussion, they explained the importance of establishing a role to support other senior managers and the board, with this person having no significant responsibilities except overseeing the implementation of the merger. This would allow the senior team to stay focused on the day job.
I have also heard this role of merger captain, or merger adviser, described as a “wedding planner”: someone to absorb the worries of organising the arrangements and bringing the partners together.
Interesting and fulfilling work
Once our college had committed formally to a merger, I liaised closely with the other principal and senior managers at both colleges to prepare an outline merger implementation plan. I also took the decision - as I approached the age of the Freedom Pass - not to compete for the position of chief executive in the new arrangements but instead indicated my interest in the part-time, fixed-term merger adviser role.
As a former local education officer and a one-time consultant, I had previously overseen and supported colleges through mergers, and found it interesting and fulfilling work.
I was delighted, after a selection process, to be confirmed in the “merger captain” role, feeling that it gave me a great opportunity to support a project I had helped to initiate. It also fits well with the part-time role of Association of Colleges (AoC) president, to which I was subsequently elected. The AoC having a president with experience of principalship and mergers will, I hope, be helpful to the sector.
I’ve heard the role described as a ‘wedding planner’, bringing the partners together
My advisory role has included keeping the merger plan up-to-date and monitoring progress with the shadow board and an implementation group drawn from the senior managers appointed to the new top team. Regular updates have been shared with the two governing bodies and other managers.
I have also produced and maintained a merger risk register, and will continue to do so for at least the first term, post-merger.
Key work in the period up to merger included supporting the senior managers to ensure due diligence was undertaken, including on which corporation should dissolve; ensuring that the statutory consultation processes on dissolution, a new name and TUPE (transfer of regulations) were completed; and supporting communications with internal and external stakeholders, including funders.
The senior managers worked closely with the chief executive designate and myself to develop the curriculum, budget and financial plan for the coming years, and successfully resolved banking and pension issues, which can be key merger challenges.
‘Partnership of equals’
The role also included supporting the shadow board, working with the chief executive and chairs to develop plans for a new, combined board membership and new chair of the continuing corporation.
Our approach was based on a set of principles we called a “partnership of equals”; this included retaining existing brands, developing a new name and appointing two borough principals to manage the constituent parts of the college. Another key role was helping to prepare the documentation for the transfer of assets, liabilities contracts and leases, ensuring completion before the end of July.
On 1 August this year, the merger took place with scarcely a hiccup, thanks to the strong leadership of the chief executive and senior team, the firm guidance of governors and a detailed and clear merger plan - although I would say that, wouldn’t I?
In some ways, our merger has been comparatively straightforward, given that both colleges were graded “good” by Ofsted and had at least a satisfactory financial health grade. The two colleges have also retained their names and campuses in each borough. Many other mergers will require a more significant intervention.
Whatever type of merger you are considering, I can strongly advocate the benefits of the merger adviser role.
Ian Ashman is merger adviser to Hackney Community College and president of the Association of Colleges @IanAshmanSkills
