Leading the separation transaction for a Victorian school

Edmund Rice Education Australia (EREA) governs the financial decision making and wellbeing of >55,000 students and 50 schools across three states. Under regulatory action in Victoria, EREA was directed to transfer proprietorship and licencing to its Victorian schools.

KordaMentha was appointed by the Board of one of the Victorian schools ($60m revenue p.a.) to support pre-execution transition negotiation and get the school operationally ready to accept their licence.

Working alongside the Board and School Management KordaMentha led negotiations to reduce annual service fees by c.$900k p.a., prepared due diligence on the transfer of liabilities and prepared the Day One readiness plan.

The key objectives of the engagement were for our team to: 

• Support legal negotiations on the form of the transfer and the establishment of the school’s new constitution
• Develop and support the school to deliver a plan to be ready for Day One of proprietorship
• Liaise with Regulators to ensure obligations were met
• Conduct discovery on the liabilities that would transition to the school upon separation
• Define the changes that the school needed to make to meet licence obligations
• Analyse and negotiate the adjusted annual service fee that the school would pay in future.

How we helped

We assembled a lean, senior team to engage with client and counterparty stakeholders to support a successful negotiation outcome and ready the School for separation. Our approach was to embed with the School’s Board and leadership team act as their key advisor, relied upon heavily to coordinate legal advisors, the Board and school leadership.

Outcomes 

• We delivered successful outcomes for the School, including:
• Confidence for the Board that full discovery of potential liabilities had been conducted
• Successful navigation of regulatory and legal requirements, delivering to the Regulator’s timeframes in a conflict-heavy environment
• Reduction of annual service fees by c.$900k per annum
• A transition plan for the school, which detailed roles and responsibilities and supported the Board in successfully receiving proprietorship
• A communications plan for use with School staff, parents and the broader market.