RECENT figures show that only 55 completed transactions were announced in the North East for the first six months of 2011, a fall from 85 transactions in the previous six months.
However most professionals in the North East M&A market remain busy with a mix of traditional sales and acquisitions and investments.
There are also an increasing number of non-traditional transactions emerging from the public sector.
One type of these transactions are academy conversions where schools controlled by the local authority effectively set up as independent entities and acquire the assets from the local authority.
Figures released in June 2011 show that more than 1,200 schools nationally have now applied to become academies under the Academies Act 2010.
This legislation allows schools to become academies without a sponsor (from the private sector), as previously required.
The total number of open academies in June, including those opened under the previous government, was 704 with this figure continuing to increase on a monthly basis.
The sheer volume of schools going through the academy conversion process has seen a whole new market emerge.
This is a fascinating area which, by its very nature, combines the need for commerciality but within the ethos of the wider education sector.
The academy model may not be right for all schools, and the figures above show many are exercising caution before going through the conversion process. However, there are now many successful examples of academies both regionally and nationally.
The conversion process necessitates a shift in the running and organisation of the school itself, with schools essentially becoming autonomous corporate entities.
Following completion of the conversion process, academies are becoming purchasers of a whole range of services including accountancy, legal, IT and software, HR support and business planning. Many academies are continuing to exploit the opportunities of working together with other schools to maximise the opportunities afforded by this change of legal status.
:: Craig Swinhoe is a partner in the corporate finance team at Muckle LLP
