Interesting times for GEMS, the international schools chain with a customised school model at almost every price. The news of their successful move on Ma’arif in Saudi Arabia, another school chain, is out and now they can enjoy having a large Acquisition under their belt.
I almost added, “at last” because, in their sixty years as a schools business, with rapid growth in the last two decades, this is the first significant Acquisition for GEMS. Plenty of people will have been working very hard to get this purchase over the line. These are both big companies.
Coincidentally, I have been writing about Acquisitions lately and given GEMS’ habit of being a market pace-setter, it will be intriguing to see the Integration strategy they deploy. There will be lessons for everyone, because acquisitions are going to become more common over the next 5-10 years.
Will GEMS put in their own management team or let the Ma’arif team continue, as they are? Will they want Ma’arif to operate solely as a national provider, focused on Saudi Arabia, or will they use this Acquisition to develop a stronger international Arab offer than GEMS has had hitherto? Ma’arif has done international schools itself.
Will GEMS work with Ma’arif to diversify their own provision in the UAE and elsewhere in the region? What will be consolidated in back office, in technology and in terms of deploying new capital? Will GEMS’ excellent front-of-house approach be taken into Saudi? Where will a bridge be built on Academics?
And how will this work with the added player, Hassana, who are the investment arm of a pensions fund?
What will the Value Creation Plan be? What will the Integration strategy be?
One option is to keep the overlap between the two school chains limited, with the main dialogue for the first two years being about finance, performance management and their own distinct growth plans. A case of separate paths until the synergies are clear. Of course, they may find over time that there are few synergies worth exploring, in which case those paths may never really join.
At the other extreme, the option is a ‘takeover’, complete with a turn-round team and a 100-day plan running through the finance, people, operational, and academic changes that are mandated to integrate the businesses fully.
And there will be several options in between.
This is going to be very interesting to follow, not least because it is also a big move for a more open Saudi.
GEMS will need to add fresh minds and new skills for the next part of their journey. And yet, they have never hesitated about taking the first move. It is not in their nature.
Watch and learn.
