mergers growth strategy

When Mergers and Acquisitions Work as a Growth Strategy

There have been countless articles and papers and studies and presentations about the consolidation of higher education – but most mergers and acquisitions have been reactions to weaknesses and hopeful attempts to save one or both institutions. 

But how many of you and your boards have mergers and acquisitions on the table as a growth strategy? 

Mergers and acquisitions (M&As) are extremely effective when you want to offer new programs and services, enter new markets, serve new audiences/segments, and acquire expertise and intellectual property. 

But they also come with challenges that, on the front end, include the time, money and attention of leadership required to explore the possible opportunity and, on the back end, include the melding of two possibly distinct cultures. Plus, you need to avoid the all too common challenge of getting caught up in ‘doing the deal’ regardless of all the signs indicating the deal is not in the best interest of those involved. 

M&As should be more strategic than a sole focus on cutting costs – and to be honest, if you’re considering M&As simply to cut costs, you might just want to explore the many purchasing alliances that currently exist. 


The recent acquisition of Kaplan by Purdue to create Purdue Global is an example of a strategy to gain expertise, programs and services, technology, to expand market share in primary/secondary markets, and to better serve existing and potential audiences. 

Yes, this specific acquisition took a great deal of time, effort, energy, and money – the deal was first announced in April 2017 and did not receive approval from the Higher Learning Commission until March 2018 – but it should be extremely interesting to see what happens over the next 1-2 years. 


During the M&A process, and after, senior management can become too focused on the process, leading to missed opportunities and threats that damage operations, performance, and endanger foundational values and missions in one or both entities. 

Once completed, the new entity needs to address the two cultures that exist – meld them if possible, or help one group transition to the surviving culture. This is a great deal of work over time that is impacted by decisions impacting peoples’ values, their behaviors, and the organizational structure – and employment status – of the faculty and staff. 

Another challenge is the impact on the audience – do they understand what is in the new institution that benefits them? And in those situations where the new entity takes two well-established brands and creates a new one, you are putting at risk the brand awareness that has helped attract and retain students. 

The case for fast action and a short timetable is generally strongest where it is necessary to maintain confidence, where one of the colleges is in a financially weak position or where there is a leadership vacuum (for example if one of the principals has left or is planning to leave). Speed may help the new college secure the benefits from merger as soon as possible. 

The case for a slower, longer timetable is that it allows institutions more time for  implementation and planning.  

From recent history, here are 5 lessons to keep in mind: 

1. Bringing Value 

To appeal to a potential merger partner, each institution must bring their most-valued assets to the table. The key is to maximize and demonstrate the benefits and positive qualities of each institution. 

Massachusetts-based Salem State University, for instance, considered a possible merger with the financially struggling Montserrat College of Art in a deal that would have helped Salem State acquire property and boost their current academic offerings. After six months of considering the merger, however, Montserrat said the transition would be too expensive and complex, ruling out a formal merger. But the lesson still rings true: When considering a merger, each institution should see value in the potential arrangement; otherwise, the deal runs the risk of falling flat. 

2. Checking Egos at the Door 

It is human nature when one partner feels it is stronger, and therefore, believes it has the right to dictate the terms of an agreement. But that attitude can be caustic, and it could cause a merger to fail. In an ideal situation, both parties involved must feel comfortable with the terms of the arrangement. This means, from the top down, institutional leaders, faculty, and support staff should aim to see the big-picture instead of getting tangled in personal minutia, such as job titles and seniority. 

3. Developing a Common Vision 

History and traditions are important intangibles, especially at colleges and universities. Not only do they help develop an institution’s reputation and brand, but they shape faculty and student academic behaviors and their very identities. Thus, when two brands merge — potentially bringing widely divergent histories and cultures — they may find themselves at a difficult crossroads. In order for both parties to be comfortable with the transition, the academic and social cultures of the two partners must be in sync. 

4. Being Transparent 

When Sweet Briar College, a small women’s college in Virginia, announced in March it would close its doors, it came as a surprise to many in the higher education industry. While that announcement has since been reversed — and the college continues to stay open — the importance of transparency while making a decision to close became known. 

Many faculty members, as well as students past and present, said they were unaware about the college’s decision-making process, and the possibility of closure came as a surprise. It is important, therefore, to provide a broad vision wherein everyone has a genuine understanding of the challenges and consequences at hand. To be successful, a merger requires consistent communication as well as a process for explaining how all parties can benefit. 

5. Proceeding with Caution 

An institution’s decision to merge or acquire should never be taken lightly — yet dire circumstances are pushing more to contemplate and seriously consider this radical option. If you are a college or university stuck in this precarious position, know that you are not alone, as there are legal, business, and strategic resources available for your transition. Most importantly, when you remain focused on you institution’s mission and purpose, making a challenging decision can become just a little bit easier. 

Written by

Strategic turnaround consultant and writer.

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