Investor insights on mergers and acquisitions (M&A) in the International Schools’ market

The international schools’ market is entering a new phase of consolidation. During a panel discussion at IPSEF Global London, involving investors, advisers and education specialists, experts explained that understanding data, demographics and school culture will be key to successful transactions and continued financial success in the sector over the next decade.

Marianne Curphey

13 July 2026

Financial pressures are driving consolidation

The panel session, M&A at home and abroad, was an in-depth discussion on the market trends for Mergers and Acquisitions and partnerships in the International Schools' Market, chaired by Vipul Bhargava, Partner, Novistra Capital. The panellists taking part were John Forsyth, Founder & CEO, Forfar Education, Duncan Murphy, Chief Strategy Officer, MTM Consulting, Ross Barfoot, Partner at Dentons, and Andrew Elias, Founder, Growth Story Advisory.The strongest consensus from the panellists was that consolidation is becoming inevitable and that despite rising costs, there were still opportunities for education groups to expand and capitalise on economies of scale and grow their international portfolios. They discussed how school operators were dealing with new financial pressures and declining pupil numbers in some markets and that not every school would survive independently, but that there were still plenty of opportunities in new markets.Another key point of the discussion was that in order to succeed and expand, school groups needed to understand the specific market dynamics of the regions and countries they were planning to operate in. In some regions, international investors and education groups might need to be prepared to build on new greenfield and brownfield sites if they were unable to find suitable schools to buy and add to their portfolio.Nevertheless, the delegates at IPSEF Global 2026 in London’s Woburn Hall heard that there were still opportunities in the international schools' market for savvy investors and school groups looking to expand. As Ali Aliev, Director of Business Development, North London Collegiate School International, explained in his presentation earlier in the day, the international schools' sector is experiencing unprecedented growth, with over 14,800 institutions worldwide and 376 added in the past six months. Asia now accounts for 58 per cent of this total, led by China and India.

A saturated market

However, this rapid expansion means that some urban centres have too much capacity. The panel agreed that in some regions there were too many schools and too few children, and analysis of demographics meant there would likely be mergers or closures as a result. This might include a “managed merger” to save a failing school, or even starting the process of closing down if a buyer could not be found. For investors, there is likely to opportunities during restructuring in the market as well as increased demand for high performing schools.A recurring theme was that investors needed to distinguish between schools experiencing temporary financial pressure and those with fundamentally unsustainable operating models. Understanding the difference was important, because otherwise financial restructuring to save a failing school was merely “kicking the can down the road”. It was not enough to inject capital into an inefficient school. Principals, school boards and investors needed to be realistic about underlying structural issues and whether they could be realistically solved. From the point of view of investors, an attractive school was one that showed operational quality, long-term demand and management capability.For schools that are operating in a market where student numbers are falling due to demographic changes, or because of overcapacity, it may not be possible for them to operate at low enrolment levels long term, and merger or closure might be inevitable.“The whole concept of a managed merger or closure is something that we are going to see a groundswell in the next 12 months,” said Duncan Murphy of MTM Consulting. “There are too many schools, there are not enough children. The demographics are clear, and things will have to change.”John Forsyth of Forfar Education explained that when carrying out financial due diligence on schools, over 90 per had staffing costs in excess of 80 per cent of their income. Yet even though in some cases the principals and boards had been aware for some time about the problem, they were reluctant to make the changes necessary to secure the long term financial viability of the school, often because of sensitivity around communicating the changes to parents and other stakeholders.“Many of the problems that schools face are staffing costs, having debt or leverage without really understanding what that commitment means, and being overleveraged with high interest payment,” he told delegates.“If there was a focus on staffing levels, then potentially a lot of these schools could be saved,” he said. “For example, I spoke to people five years ago and explained what we needed to do, but there has long been a cultural resistance from trustees to the issue of managing staff within schools within the charitable sector. As a result, they are hugely overstaffed.”While staffing costs have risen, in some cases by 20 per cent over the last few years, some of these schools have at the same time been offering discounts to bring new students in. The combination of falling income, rising costs, and new charges such as business rates, have meant that financial pressure has been increasing.Duncan Murphy cited the example of a school that had a balance sheet with a £1.5 million operating deficit because they had not acted on data and changing demographics.

New trends in M&A in the international schools’ market

As a result, one new trend in the market has been consolidations and mergers between these charitable schools. Future consolidation is expected to involve more commercial operators, education groups and private capital. Yet the panel discussion highlighted a notable difference between charitable organisations and commercial operators in terms of the speed of decision-making. For example, commercial organisations are often able to assess opportunities and execute transactions significantly faster than charities or governing boards. Commercial groups are used to making quick and robust decisions, because in competitive sale processes, this agility can be a decisive advantage. However, charitable boards often have a much slower decision making process.Duncan Murphy of MTM Consulting explained how “risk averse” trustees were slow in making decisions around charitable mergers, and the process was often slowed by the need to get the “PR and narrative right” and by procrastination by boards of governors and charities who did not always view the outcome through a commercial lens.On the subject of, international expansion, Russ Barfoot of Dentons explained that some international schools’ groups were looking to acquire UK schools with a heritage brand in order, to give the existing international portfolio some kudos on the world stage.The panel also discussed the importance of real estate and the value of physical assets which often went with the school. While property underpinned the value and often reduced the risk of the financial transaction, the panel cautioned against equating property value with intrinsic school value.“Real estate is important because it underpins risk,” said Duncan Murphy, adding that sometimes there was a mistaken view that the real estate value was “a mark or indication of the value of the school”. He said the key difference between a commercial and a charitable purchase or merger was “speed, agility and decision making”.“Time is king. What you will get from a commercial group is a very, very quick and robust decision, but equally an open mind. And I think it would be very wise to assume that an asset base is important when dealing with a commercial group.”Several speakers argued that schools cannot rely solely on traditional fee income. Additional educational services, including Special Education Needs (SEND) provision, language programmes and wider community use of facilities could be potential new sources of income and an opportunity to build up greater financial resilience.

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Competition for quality assets remains intense

Despite current market pressures, high-quality schools continue to attract significant buyer interest, and valuations have been pushed up as a result. As premium acquisition opportunities become scarcer, investors may increasingly be forced to pursue smaller regional platforms or develop new schools through greenfield or brownfield projects.The panellists also discussed the growing size of international education groups and how scale can be both an advantage and a risk. Given their huge global portfolios, this is an issue that groups need to be aware of, especially during negotiations to buy a family owned school or school group.While large education groups clearly benefit from purchasing power, shared services and operational efficiencies, excessive growth can potentially dilute a school’s individual culture, which would make it less attractive to some parents. In addition, being part of a very large and potentially impersonal management hierarchy might make acquisitions less attractive to some family owners. Overall, successful transactions require more than commercial logic, as Vipul Bhargava, Partner, Novistra Capital and panel chair explained: “Around 90 per cent of my work is managing emotions”.John Forsyth of Forfar Education said sellers were not interested primarily on price, and that for some owners or founders of schools “education is emotional”.“Scale will become a hindrance over time,” he explained. “For example, in Madrid, some group schools have not kept the culture there, which is something that is very important to parents.“The problem is that if you have 130 schools and you are trying to persuade a family in Greece to sell to you, it is very hard for them not to see themselves as just number 131 who is going to report to the head of Greece and then the head of Southern European. In other words, just another number.”He said that in order for operators to be really successful, they are going to have to create a narrative around being a child focused group.“That is incredibly hard to do when you are operating at significant scale and it takes skill and diplomacy. It is about the good old fashioned business principles of bringing people's trust and respect early in the process.”Ross Barfoot said that because there was a lot of competition to buy high performing schools, you needed to “sell yourself as a buyer” and explain the future plans you had for that school.“You are not buying from another schools platform, you are buying from a family, and often these types of sellers want to make sure that the school they created is handed over to the right person.”Vipul Bhargava noted that if a family was selling out 100 per of their stake then they might be less concerned than if they were selling a 60 per cent stake and were planning to continue to have some involvement in the school going forward.When discussing new opportunities, Ross Barfoot argued that while the Middle East is still an excellent region, there was an increasing number of buyers “all chasing the same assets”.“It is why I think we see in certain jurisdictions a lot more greenfield projects than acquisitions because they definitely need more schools but the buying opportunities are not necessarily there.”He said clients were looking for opportunities in Romania and in Poland. John Forsyth said Forfar Education had been “very focused on first of all growing and stabilising around acquiring good schools in Southern Europe” as well as looking to expand into North America or the GCC in the Middle East.He said that buyers looking to purchase schools needed “deep pockets” and a clear strategy on synergy in order to make the acquisition commercially viable.

The importance of looking for new sources of funding for struggling schools

Pam Mundy, founder of Pam Mundy Associates, speaking separately from the panel, said that these trends in financing and private equity were likely to continue.“Setting up abroad and the desire to do so, particularly for cash-strapped UK schools, seems in many cases, to be driven by the belief that the proceeds from an overseas venture might help to offset the financial demands that private schools face as a result of the new burden of VAT on school fees,” she said.“The VAT relief previously used for charitable purposes and bursaries is no longer available, and many other ventures funded by such revenue have disappeared. To assume that an international branch campus will generate this quickly is overly optimistic. Revenue takes time to accrue, even from the most lucrative deals.”She said it was important to understand that a branch campus school may not make a profit for the first three or four years. There are, however, some contractual arrangements that may begin to deliver a small income stream earlier.For schools that were looking for wider sources of support, some creative thinking might proof fruitful, she explained.“It is true to say that there are existing and new international wealth sources looking to invest in education for the first time,” she said. “Sometimes, fortunate schools may tap into alumni who want to give something back, and Private Equity and Venture Capital funds are seeking new avenues to deploy their capital, with a view to making their own profit. Schools and school groups may need to be relatively open-minded about the new opportunities that are emerging, from family wealth through to commercial organisation that have not previously invested in education.”She said it was time to ‘consider all options’ but that it was still important to do due diligence and be sure that any new investor is fully committed to the new venture and understands what is involved in a new undertaking where education and the ‘human’ commitment to children and families is centre stage and vitally important.

The five biggest education and investor takeaways

Consolidation is accelerating. Mergers, acquisitions and managed closures will become increasingly common due to demographics and financial pressures.
Operational improvement is more important than financial engineering and restructuring debt. Schools with sustainable business models can often be improved through better management, particularly in reducing staffing costs.
Competition for high-quality schools remains intense. Good schools continue to attract multiple bidders, making acquisitions more expensive. This means investors might need in some cases to consider greenfield developments and start up projects.
Culture has become an important factor when buying and selling high performing schools. Unlike many sectors, education sellers often care deeply about the future of their schools, meaning buyers compete on vision, educational philosophy and stewardship, and not just price. The culture of a school is often what attracts and retains parents and diluting that culture can make the school less appealing.
Scale is no longer viewed as an unqualified advantage. While larger groups benefit from purchasing power and shared services, excessive scale can mean that individual schools lose some of their identity. This can mean that offers from large international school groups are sometimes less attractive to founders and families, especially if they are looking to retain a stake in the school after the sale.

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