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In this 3 page paper, the writer discusses the advantages of mergers and acquisitions in the for profit education industry. Examples are provided. Bibliography lists 3 sources.
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3 pages (~225 words per page)
File: MM12_PGfrpred.rtf
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has led many private schools to look for new sources of revenue. At higher education levels, institutions have gravitated towards the Internet to offer Online programs to boost their income.
The obvious advantage in a merger often means extra profits. Redundant services and activities can be eliminated thereby reducing costs for both. The resulting institution becomes larger and is
often able to attract more donations and other sources of income. Acquisitions benefit both institutions as well. The acquiring enterprise gains the resources and consumer base of the institution
acquired. The acquisition may help the acquired school from declaring bankruptcy or closing its doors altogether. A good example of the acquisition option was seen when the American College
sold its campus in Bryn Mawr, Pennsylvania (Hersch, 2006). The president of American College explained that they wanted to "focus more on education and less on the burdens of being
a landlord" (Hersch, 2006, p. 8). In this case, less than 1 percent of the students attended classes on the campus (Hersch, 2006). Thus, owning buildings and incurring the inherent
expenses did not make good business sense (Hersch, 2006). With this particular transaction, the management of American College was severely criticized and charged with fiscal mismanagement (Hersch, 2006). Critics claim
this is what caused the need to sell the campus (Hersch, 2006). Whatever the real reason, the sale will allow American College to change its outdated curriculum, hire staff specifically
for Online teaching as well as in-class instruction and realize a profit (Hersch, 2006). There are many reasons a for-profit educational institution might suddenly face challenges they cannot overcome. For
instance, the 2005 Gulf Coast hurricanes put most universities in their path out of business for varying lengths of time. The Universal Technical Institute, for instance, reported their enrollment revenues
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