Management at University College Cork has approved a merger with the Irish Management Institute (IMI) in a deal estimated at €20.5 million, according to documents seen by The Irish Times.
A planned merger between the two educational institutions fell through in 2009 because of the economic downturn. According to draft minutes from a meeting held last month, however, plans to revise the proposal have been approved by management and are to be presented to the university’s finance committee and governing body for their approval.
According to the draft minutes, a detailed update on the new proposal was presented to UCC management at the meeting. Bursar and chief financial officer Diarmuid Collins reportedly said €18 million would be needed to buy the campus with a further €2.5 million needed for refurbishment. The university is to fund the acquisition through a bank loan from AIB with repayments based on a sale and lease agreement with IMI, say the minutes. The document also says the university has already sought advice from PwC on the financial wellbeing of IMI and from Deloitte on the benefits of acquiring the institution.
Financial risks
Mr Collins reportedly also told management that the financial risks present in 2009, which stopped the merger proceeding then, had been mitigated by the fact that IMI is trading at a profit and had addressed a pensions deficit.
The IMI, which is based in Sandyford, has been providing education for executives for over 50 years. Cutbacks on spending on training courses by firms affected by the downturn meant revenues at IMI declined from more than €14 million in 2007 to €7 million in 2010. Mr Collins reportedly said the overall financial implication of merging with IMI beyond the cost of purchasing and refurbishing the campus has dropped from €8 million to 2009 to €2 million.
Having obtained a market valuation of the IMI campus from Lisney, Mr Collins reportedly said that if UCC goes ahead with the deal it could be in a position to sell a portion of the IMI campus in the near future.
Communications strategy
The draft minutes say UCC management was told that a communications strategy would be required to ensure good buy-in from UCC staff to the merger proposal with Prof Ciarán Murphy charged to lead this. President Dr
Michael Murphy
meanwhile will nominate UCC representatives to the IMI’s board of directors if the merger goes ahead, according to the document.
Under the terms of the original merger plan, the IMI was to retain its separate identity and continue to operate as a membership organisation. Both organisations said at the time a merger could enhance the services they offer as well as expanding the institute’s international reach.
Following the breakdown of the original plan, Taoiseach Enda Kenny announced a strategic alliance between the two institutions in 2012.
A UCC spokesman said the document did not contain final minutes and that it had “huge factual errors and commercially sensitive information.”
The IMI declined to comment.
