Selling A Private School
Selling a school is one of the most critical financial events in an owner's life. You have invested considerable resources in building your school business, developing a solid brand with outstanding staff, and solidifying your reputation in the market. Now that you are ready to sell, you want to maximize your school's value, accomplish your exit goals, and safeguard a seamless transition.
This is where HEG comes in. Our seasoned team combines decades of experience across a wide range of private school sectors, delivering customized services critical to successful sales. The reason for our success is simple – we understand our clients' expectations and exceed them. We work with a range of online and on-ground for-profit and non-profit schools in Canada, the USA, and internationally. These range from K-12 private schools (e.g., preparatory, special needs, Montessori, International Baccalaureate) to boarding high schools, ESL schools, private career colleges, and universities.
Road Map To Successfully Selling A School
We recognize that no two transactions are alike, and we deliver a customized approach tailored to your sector's needs and a roadmap to success. We invest the time and resources to thoroughly understand your opportunity, ensuring a clear game plan is developed. From preliminary valuation advice to negotiation and closing, we leverage our transactional and advisory experience to make our clients' aspirations a reality and, convert an owner's hard-earned business equity into cash and realize their objective. Our process is handled with the strictest confidentiality and minimal intrusion into the school's operations. Our veteran team manages every aspect of the transaction process, allowing ownership to stay focused on their day-to-day operations. Provided below is an overview of the personalized advisory process HEG provides regarding the sale of your school:
Private School Sale Process
(1). Preparation, Valuation, and Positioning
HEG holds a series of meetings with the school's ownership to get to know you and formalize the scope of our services (e.g., timelines, roles, costing, process, and reporting of prospective activities). HEG will provide a checklist for related information regarding the school for the seller to provide regarding school operations and material data (e.g., facilities, educational program, HR, accreditation, ownership structure, enrolment, material contracts, financials (revenue/profits), history, inventory, tuition). HEG will review pertinent documents, complete a market analysis, and summarize the financial information (e.g., financial statements, P&L, Balance Sheets, Inventory) to recap the school's revenue, expenses, and EBITDA for the last three fiscal years, as well as projections for the current year. HEG will conduct an on-site assessment visit (if feasible during the COVID-19 pandemic) of the campus and hold ongoing meetings with the seller as part of the preliminary assessment process. Based on the assessment of the school's financials and market benchmarks, HEG will provide a pricing analysis of the suggested transaction value for client approval.
(2). Create Customized Marketing Plan
There is an ideal buyer for every school. Moreover, there is the ideal school for every buyer. Choosing the right strategy to reach them is critical. Our team develops a comprehensive marketing plan, leveraging our extensive operational expertise and in-depth knowledge of the education sector. We prepare a series of approved marketing documents and data room to be shared with prospective buyers. This includes the preparation and approval of a Confidential Information Memorandum (CIM) and Teaser Doc to market the school to potential buyers. We follow a proven process to safeguard sensitive and confidential information, navigating the deal discreetly and seamlessly. We utilize proven marketing strategies and global reach to present the school to the right buyers from our list, from direct contact with targeted companies, networking with other professionals, online advertising, social media, email campaigns, and more. Based on the profile analysis and suitability, HEG conducts an in-depth study of transactions (mergers, sales, divestitures) in the USA, Canada, and internationally over the past seven years, shortlisting profiles of potential buyers. HEG will research and contact pre-screened buyers to determine their level of interest.
(3). Target Qualified Buyers
We have compiled an extensive list of over 10,000 qualified, pre-screened buyers in our database, seeking to purchase educational businesses across various markets and school types. These include corporate buyers seeking platforms or add-on acquisitions, high net-worth individuals, private equity firms, family offices, and other qualified investors interested in acquiring private schools. We know how to position the school in the best light possible to enhance its value. We will leverage multiple buyers through our various channels to create a competitive purchasing environment for the school. The process involves HEG contacting prospective buyers to gauge their interest in the school's profile, making introductions, and facilitating the exchange of associated documentation. HEG will post high-level, anonymized information regarding the school on high-traffic websites and HEG's online newsletter to HEG's database of buyers.
(4). Solicit and Evaluate Offers
If a buyer indicates interest, HEG provides a confidentiality agreement (NDA) for them to execute, along with the CIM and related information, to facilitate an informed decision. Only interested parties receive access to the CIM after signing a non-disclosure agreement (NDA). The seller will be provided a digital copy of the executed NDA and bio for each buyer. Before submitting LOIs, interested parties may wish to tour the school to see it in action and have a conference call with ownership. HEG will coordinate responses to due diligence queries from buyers, as well as monitoring and updating a secure and confidential data room. HEG updates our clients on all related activities weekly. HEG will continually provide due diligence support and facilitate the exchange of information as part of the pre-offer due diligence process. As feasible, HEG will schedule on-site meetings with the buyers and the seller at the school within a short timeframe.
(5). Finalize The Offer Sheet and Buyer's Due Diligence
After conducting pre-offer due diligence, interested parties will present their official offer in the form of a Letter of Intent ("LOI"), and negotiations will commence. HEG will advise the seller of prospective buyer activity and recommend moving forward with a shortlist of the top finalist candidate buyer(s) and the final selection. Within the process, the buyer will provide proof of funds. During the due diligence process, the buyer will request, among other items, staffing, contracts, accreditation, facilities, IT, legal, tax returns, financial statements (audited, if available), and other financial reports regarding accounts receivable, expenses, revenue-generating contracts, cash assets and indebtedness of the target. We are focused on optimizing the deal terms, direct due diligence, and assisting your professional team with closing the deal. The due diligence process typically takes between 30 and 60 days, depending on the transaction's complexity and regulatory requirements. Our job is to make the process as painless as possible.
(6). Definitive Purchase Agreement Finalized and Transaction Closed
During the LOI due diligence stage (leading up to the definitive purchase agreement), HEG will provide information and documentation to, and otherwise support, the seller and their professional advisors as required during the process leading to the completion of the transaction. This includes coordination with the seller's "team" of professional advisors, such as legal advisors, accountants, and others, as required by the seller. The definitive purchase agreement may be in the form of an asset purchase or a share purchase, depending on the deal structure and regulatory requirements. Every state or province has its own licensing regulation laws and approval process, and the closing process may require regulatory approvals before the transaction is completed. Once the legal agreements are signed, accreditation is finalized, and the transaction is closed, a PR plan will be implemented to inform the school community about the change in ownership.
Next Step For Selling Your School
Our personalized M&A services include a preliminary market analysis, a custom-tailored marketing plan that highlights the school’s unique value points, an introduction to pre-screened prospective buyers from our list, an analysis of offers, and advice on preparing the offer sheet with the client’s professional team to facilitate a seamless transaction. Our focus rests exclusively on the private school sector. We are recognized as industry experts with extensive knowledge and transaction experience in the private education market, having successfully advised on the sale of numerous private schools in the USA and Canada. Having done business for many years in every imaginable economic cycle, we provide constructive and practical strategies to achieve ownership’s financial goals.
If you would like to learn more about our M&A services, including buying or selling a school, or discover the current value of your school in today’s market, please contact HEG directly at info@halladayeducationgroup.com or our toll-free, confidential number at 1-800-687-1492. We are confident that we will find the right solution for the successful sale of your school. Contact us today to receive our complimentary valuation and schedule a 30-minute one-on-one consultation. You can also click on the following link for additional information on schools we work with: www.buyingandsellingschools.com/schools-for-sale.
