A&O, Herbert Smith and Weil act on CoL sale
Allen & Overy (A&O), Herbert Smith and Weil Gotshal & Manges have landed roles on the potential sale of The College of Law (CoL).
The school, which has a turnover of around £75m, was put up for sale in September 2011 following a full-scale strategic review (2 September 2011), attracting interest from private equity firms.
Buyers linked to the deal include buyout firm Providence Equity Partners, educational publishing and technology company Pearson, KKR-owned Laureate International Universities as well as Palamon Capital Partners and a joint bid from Exponent Private Equity and Sovereign Capital.
It is understood that longstanding counsel A&O is advising the CoL on the sale process, while Herbert Smith and Weil are advising Pearson and Providence Equity Partners respectively.
All three firms declined to comment on their involvement.
According to bankers, the sale, expected to be agreed by the end of February, could fetch around £150m to £200m. Any sale of the CoL would mean the Legal Practice Course provider losing its charity status, which it acquired in 1975.
The CoL’s main rival BPP Law School is already owned by a private equity-backed joint venture, US-based Apollo Global, which is made up of Apollo Group and private equity house The Carlyle Group.
Readers' comments (8)
Anonymous | 26-Jan-2012 12:47 pm
What on earth are the aims of the CoL charity and how can a sale to a PE buyer possibly further them? It would be interesting if The Lawyer asked the trustees to justify not only this sale but also how they arrived at paying the CEO, Nigel Savage, an utterly outrageous package exceeding £400K per annum.
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Anonymous | 26-Jan-2012 1:56 pm
A charity could quite easily justify such a sale if CoL is struggling to make a profit or even making a loss... some say CoL are paying A&O's fees by promising to make their A&O bespoke LPC course extra boring and soul destroying.
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Anonymous | 26-Jan-2012 2:06 pm
Hmm.
The only way this proposal works is if the value of the CoL's charitable assets (i.e. its total value as it stands, including goodwill and the value of its brand) are retained in trust for the charitable purposes of the CoL.
If the buyer wants to run the CoL for profit, then essentially it can acquire the CoL's assets and operations at market value- but the cash paid has to stay in a charitable trust. Presumably this will be used to fund the legal education of those students who can't afford the no doubt preposterous fees that the newly private CoL will charge, and which presumably daft City firms will be prepared to cough up for those to whom it gives training contracts. Quite why the entire Magic Circle never thought to tell the CoL that its fees were outrageous is utterly beyond me.
As for the pay packets of the directors - goodness knows why the Charity Commission thought they were acceptable. Those pay packets put all of the CoL's directors in the top 50 most highly paid charity employees(not %, the actual top 50 people). The trustees came out with the usual guff about 'benchmarking', but quite whom they were using for comparison remains a mystery The CEO of Oxfam gets £108k; the vice-chancellor of Bristol Unviersity (about 4 times the turnover of CoL) gets the same as Savage. Yet another example of jobs for the boys tied to supine regulation? I fear so.
The Charity Commisison's usual line in cases of its own failure to regulate is that such decisions are up to the trustees. Which begs the question why the Commission exists at all, when pay packets like this are excessive by any standard (charity or not) and plainly bring the charitable sector into disrepute.
I would be intrigued to know what kind of sweetener (if any) Savage & co are due to receive as part of this deal - and how the trustees can possibly justify such a sweetener as being in the charity's best interests.
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Rural bliss | 26-Jan-2012 2:21 pm
Very well said, Anonymous 2:06pm.
I remember being shocked when I heard about the extortionate payments made to Nigel Savage, and wondering how any organisation that had managed to get registered as a charity could possibly justify such extravagance.
And no doubt because he and his cronies have managed to line their pockets so lucratively their payoffs will have to be proportionately ludicrous.
Of course the trustees will now waste even more money employing a super-expensive firm to advise on the payoffs, and will then justify them by saying they were arrived at "having taken appropriate professional advice".
Sickening.
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Anon | 26-Jan-2012 3:21 pm
CoL charitable aims #1: "TO IMPROVE THE PERCEPTION OF VALUE OF ITS TRAINEE TRAINING AND TO REDUCE COSTS AND TO DEVELOP AND PROVIDE COURSES TO THE PUBICLY FUNDED MARKET"
CoL charitable aims #2: "THE PROVISION OF LEGAL EDUCATION AND TRAINING TO SERVE THE NEEDS AND EXPECTATIONS OF THE DIVERSE LEGAL SERVICES AND STUDENT COMMUNITY. FURTHER DETAILS CAN BE OBTAINED FROM THE ANNUAL REPORT AND ACCOUNTS 2010."
You pick which might fit best with a new PE firm....hmm indeed.
As regards divesting itself of the jackpot payout, has anyone seen the exit clause(s) in Mr Savage's employment contract? I haven't, but I can guess how it/they might read!
Jolly good.
Bye bye.
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Anonymous | 26-Jan-2012 7:51 pm
I also agree that any sort of payment to Savage (or anyone else) would be totally inappropriate.
Does anyone know how the commissioners of the CoL charity are appointed? Is there anything that alumni can do to put a stop to this apalling state of affairs? It also doesn't say much about the firms that use the CoL to stand by and do nothing.
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Andy Carroll | 27-Jan-2012 2:09 pm
£150-200m for the College of Law? That's even more inflated than my transfer fee.
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Anonymous | 27-Jan-2012 2:33 pm
Take a look at Mr Savage's biog (on this site a number of years back) and you get quite a clear idea of why he is paid the amount he is.
As Dean/Managing Director of Nottingham Law School he was the man who could have driven CoL into the ground. How better to stave off what looked like an almost inevitable collapse than to entice your opposition's most potent weapon to the helm. Look at the inovations and growth of CoL in terms of courses offered etc since he joined.
The trustees decision was probably based on get him or watch the whole thing die a slow and ignominious death. Faced with a rock and a hard place decision what do you think they should have done??
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