Patrick Tucker

It should be no surprise that Mergers & Acquisitions (M&A’s) have slowed down during COVID-19 (CV19), however within the last couple weeks we have noticed that M&A’s are starting to pick up. This pick-up is partly because business is slowly getting back to the ‘new’ normal and because business owners might want to exit, owners might be distressed, or they want a business combination which will be economically beneficial. 

I predict that Covid-19 is set to unleash a wave of mergers and acquisitions, it is inevitable that organisations may look to take over direct competitors to combine their strengths and streamline costs, in-short, to gain a competitive advantage or a larger market share. This is simple business economics and understanding of the market to capitalise on the CV-19 situation, one could argue the ethics behind this, but when a company (training provider) is struggling, then a merger or an acquisition could be hugely beneficial for both parties. 

This is not new in the corporate world, and big-box retailers like Walmart and Target and e-commerce giant Amazon are seeking opportunities. These M&A’s deals can be structured in a short time, especially when an organisation is in financially difficulty. It is well known that ‘hostile takeovers’ can indeed be successful, and speed is of the essence, some of the top and well-known hostile takeovers are:

  • Kraft Foods Inc. and Cadbury PLC
  • AOL and Time Warner
  • Sanofi-Aventis and Genzyme Corp
  • Nasdaq OMX/IntercontinentalExchange and NYSE Euronext.

Given all types of companies will be under financial strain now and especially post CV19, we predict that due-diligence will take longer than normal, indeed we see new financing-related questions and challenges facing buyers/borrowers may include some of the following:

  • Will the buyer’s committed debt financing be available when the time comes to close the acquisition?
  • Will the lenders increase pricing due to the risks of the coronavirus crisis, and insist on tighter financial agreements?
  • What additional due diligence will a lender insist upon, 
  • How much delay will that involve?
  • What obligations will buyers have in the event they cannot close a deal quickly?

Under section 9 of the ESFA’s Apprenticeship Agreement for Training Providers, Spring 2020, Version 1.0, it informs:

  • 9.1 - The Training Provider shall not without the prior written consent of the ESFA assign, novate or otherwise dispose of or deal in any other manner with (including by means of a change in ownership of the Training Provider) any or all of its rights, obligations or liabilities under this Agreement.


  • 9.3 - The Training Provider will inform the ESFA as soon as reasonably practicable and, in any event 12 weeks before, any Change of Control of the Training Provider takes effect unless to do so would put the Training Provider in breach of the Law.If that is the case the Training Provider will inform the ESFA of the Change of Control within 10 Working Days of it becoming lawful to do so.


  • 9.4 - The ESFA reserves the right to take whatever action it deems necessary, including but not limited to terminating the Agreement in accordance with Clause 24.2 (Termination) if it considers in its absolute discretion that any, or any proposed, assignment, novation, disposal or other dealing, including any Change of Control and / or of name of the Training Provider, may or would:


  • 9.4.1 - put public funds at risk,
  • 9.4.2 - put at risk the delivery of Training to Apprentices, and / or
  • 9.4.3 - the ESFA has any other material concerns about the proposed assignment, novation, disposal or other dealing.


  • In deciding what action to take in accordance with Clause 9.4 the ESFA will consider the criteria set out in the Funding Higher-Risk Organisations and Subcontractors Policy (or any updated or revised versions) which is published on the ESFA’s website

We (Promote-ed) are therefore seeking to request from the ESFA that they look to change the 12 week rule in section 9.3 (in any event 12 weeks before, any Change of Control of the Training Provider takes effect unless to do so would put the Training Provider in breach of the Law) to a 2 week notification during the process (and not before) which will allow for a smoother process for any acquirer or an potential merger. 

The 12-week rule adds a further 3 months onto the M&A structure, as it needs to be done “before, any Change of Control of the Training Provider”. Also, the 12-week rule is not commercial reality. When there is significant economic or other uncertainty in the world of M&A’s, leverage shifts toward buyers and away from sellers. We are looking to the ESFA to realise commercial realities, and to recognise the M&A market during these times by reducing the 12 week rule to 2 weeks during the process to ensure promptness, this will ensure longevity of providers who need to be acquired or merged, or whose business owners want to sell or merge. 

I foresee that M&A’s in the training provider market will be beneficial to providers through the consolidation of providers and assets, with an eye toward stimulating growth, gaining competitive advantages, increasing market share, and supporting / influencing supply chains.

I will be looking to do an update to my dissertation “What factors contribute to the failure or success of a merger or acquisition (post integration), within the FE (Learning & Skills) sector” shortly, which will inform of M&A’s in the new world. I see M&A’s and collaboration being a big part of the sectors recovery post COVID-19, especially in an ethical setting. Please feel free to contact me to discuss post-acquisition integration and post-merger integration. 

Patrick Tucker, Promote-Ed 

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