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Considering Acquiring Another Academy?

on Wednesday, 22 November 2017.

By carrying out thorough due diligence on the property and the operation of any potential new academy...

... MATs can minimise the risks of finding any potential issues or any practical surprises after the academy has joined the MAT and therefore avoid the costs of rectifying them.

MAT to MAT Transfers

In the last academic year there has been a sharp increase in the number of academy to academy transfers taking place - from 15 in 2013/14 to 165 in 2016/17.

Multi-academy trusts (MATs) should consider these acquisitions carefully as there are a number of differences between converting to an academy and taking on a new academy. One such difference relates to the school site and property.

On conversion a school is likely to be familiar with its property and how it operates; contrast that with bringing a new academy into a MAT, the MAT is likely to have far less knowledge of the academy that is being acquired.

On transfer, due diligence becomes even more important and can reveal issues to be addressed before the transfer takes place or ensure points are included in the transfer documents.

Due Diligence

Typically, a MAT should consider carrying out due diligence on issues such as the academy's financial position, its contracts, its staff as well as the land and property used by the academy.

In order to minimise the risks of taking on liabilities, proper due diligence should be carried out against the property.

This would involve reviewing the title to the property to check for restrictive covenants which could affect how the property is used or can be used in the future, reviewing any occupational leases or shared occupation agreements to ensure that the MAT is comfortable with the obligations that will be placed on it following completion of the transfer. It may also involve raising preliminary enquiries and asking the disposing academy trust to confirm other practical information about the property such as who uses it or whether there have been any disputes or recent construction projects.

Property Searches

MATs should also consider carrying out property searches to find out further information about the property. Such searches can include:

  • Local Authority search - this checks the local authority records relating to the property and reveals a number of matters including the planning history, details of whether the roads are adopted and maintainable at the public expense, whether the property is subject to any enforcement notices and whether any part of the site is registered as Common Land or a Town and Village Green

  • Environmental Desktop search - this provides environmental information about the property based on historic and neighbouring land uses. It gives details as to the risk of the property being designated as contaminated land and also provides additional information about flood risk at the property

  • Drainage and water search - this will reveal whether the drainage and water supply pipes serving the property are maintained at the public expense and whether there are any sewers or mains crossing the property

  • Chancel repair search - This will reveal whether there is a risk of chancel repair liability affecting the property

To discuss academy transfers in more detail, please contact Robin Rajanah on 0117 314 5255 or Sarah Outram in our Academies team on 0117 314 5253.

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