Number of charity mergers falls slightly in 2015/16

Health and social care organisations were involved in nearly 40 per cent of all charity mergers in 2015/16, according to a new report.

The number of mergers overall remained fairly static, with 54 deals compared to 61 in 2014/15.

Eastside Primetimers’ latest annual Good Mergers Index shows the largest deal was the formation the Masonic Charitable Foundation, which united four central Masons charities in an £82m deal.

Merger activity in the further education sector was dominated by the takeover of Totton College in Hampshire by crime reduction charity Nacro, which was the second biggest merger deal overall.

Intermediary organisations were involved in 17 per cent of deals, employment charities were involved in 9 per cent, and education, community, and justice organisations were involved in 6 per cent of deals each.

Analysing deals involving 116 organisations with a cumulative income of £799.4m, Eastside Primetimers found 65 per cent of charities making acquisitions were in financial surplus. Sixty-one per cent of organisations being taken over or merging were in deficit.

Among charities, mergers represented 24 per cent of deals, takeovers 61 per cent, subsidiaries 11 per cent and group structures 4 per cent.

Eastside Primetimers CEO Richard Litchfield provides commentary around the report’s recommendations in his blog for Charity Times here.

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