Client success: Goodwin University

Challenge

Led by founder and President Mark Scheinberg, since 1999 Goodwin has grown from a business technology training center into the leading career-focused institution in Connecticut. With a business model that emphasizes high graduation and job placement rates, Goodwin also has achieved sustained financial stability. Offering associate, bachelor’s and master’s degrees, Goodwin is a statewide leader in advanced manufacturing education and delivers one of Connecticut’s leading nursing programs.

University of Bridgeport (UB), despite its academic reputation and its $1.3 billion economic impact, has been adversely affected by larger trends sweeping higher education. Recognizing UB’s challenges, the State of Connecticut approached Goodwin’s Scheinberg to consider an acquisition. The alternative was to allow UB to close, creating deferred maintenance and tax liabilities for UB’s banking partner – and a devasting impact on the State of Connecticut.

Scheinberg recognized the opportunities the acquisition presented, but also the risks. “We had not planned on acquiring UB, but it made sense strategically,” says Scheinberg. “Like Goodwin, UB focused on in-demand career fields and served many first-generation college students. It would expand our geographic reach. But we would be taking on a much larger institution.”

Goodwin leadership began to explore financing options, amidst multiple challenges. Scheinberg and Eddie Meyer Jr., Vice President of Finance, turned to Bradley Hardy, Senior Vice President, Commercial Banking, at Goodwin’s longtime banking partner KeyBank.

The acquisition posed difficult issues. Goodwin needed an operating plan that would be acceptable to Goodwin’s board of trustees and Key’s loan committee. 

Accustomed to operating in the black, Goodwin would undoubtedly incur losses in the first year following the acquisition. It needed financing to not only cover operating and integration costs, but also capital investments in the UB campus. Longer-term financing was essential to avoid having to sell valuable UB assets.

Solution

Over the course of 18 months, Key’s Hardy helped Goodwin navigate the path to a successful transaction. The project involved multiple moving parts, from securing and structuring funding to finessing retention of accreditation for the UB programs that Goodwin would acquire.

Given the risks for both Goodwin and Key, Hardy recommended that Goodwin seek additional support from state and federal government sources. Since state government leaders clearly were concerned about the fate of UB, it seemed the state might be willing to provide support. Also helpful, Hardy would be able to shepherd Goodwin through the process of obtaining federal government pandemic relief funds through Key.

"Normally, financing is a straightforward ‘yay or nay’ process, but, in this case, it was a constantly changing situation,” says Meyer. “We had many late-night conversations with Bradley and our team about the risks.”

Throughout, Goodwin had to constantly respond to the demands of the pandemic environment and the ever-fluctuating condition of UB’s finances. After months of work, all the pieces came together.

“The Goodwin team was able to articulate a well thought-out and credible plan," said Hardy. “Once we understood the strategic rationale, it was easy to get behind the financing. Knowing our financing would have such a large impact on the local economy is what kept us working through the multiple challenges.”

Results

Today, UB continues to operate as a distinct brand as part of Goodwin. When many banks were restricting their higher education lending because of the COVID-19 pandemic, Key stepped up with a creative financing solution that enabled Goodwin to retain a significant number of UB employees while enabling both institutions to flourish. Enrollment has rebounded – close to pre-COVID levels – as many foreign students are once again able to come to the United States for advanced education.

Also positive, Goodwin is recovering the acquisition costs more quickly than expected. With its track record of acquiring UB and other educational institutions, Goodwin has become a national model for implementing a consolidation and becoming more streamlined to better advance its education mission.

“We have not even scratched the surface of the opportunities,” says Scheinberg. “Goodwin is now considered a state powerhouse, and we’ve received millions in new grants because of the strategic importance of the institution.”