Delaware State University is set to aquire Wesley College this week in a deal that still requires the HBCU to overcome multiple hurdles before its finalized.
What We Know:
- The boards of both schools met in late June to authorize their respective leaders – DSU President Tony Allen and Wesley President Bob Clark – to negotiate a deal that would be the first time one of the nation’s Historically Black Colleges and Universities (HBCUs) has acquired another school.
- DSU, not being asked for a cash payment from its balance sheet, will get a 50-acre, 20-building campus with an appraised value of $33 million and fairly low debt service. DSU will also be looking to renegotiate contracts with shared vendors, including food service provider Aramark and IT vendor Ellucian.
- The acquisition would fast track DSU’s growth plans. Sources familiar with the deal say the university, which has just over 5,000 students, believes it can retain the 900 to 1,000 Wesley students who will pay just over $27,000 for the 2020-21 school year, compared with DSU’s published tuition and fees of $8,258 for in-state students and $17,294 for out-of-state students.
- DSU president Tony Allen reported the school has grown 40% in the last decade. “That runs counter to what’s happening at other colleges and universities nationally, which have lost 5.3% of their student bodies over the same time period,” he said.
- During Clark’s tenure, Wesley has reduced expenses and improved its range of academic offerings, but it has been battling well-documented financial challenges, including declining enrollment and falling revenue, a situation that was not helped by the university needing to refund room and board costs to students during the pandemic.
- DSU commissioned an economic-impact study in 2017 through the University of Delaware that estimated DSU contributed $266 million per year to the state economy. That figure could increase 30% to 40% with the acquisition of Wesley, a figure that aligns with information Clark gave DBT in September.
Clark has been looking for a partner for more than a year. In addition to discussions with the University of Delaware that UD reported went nowhere.