Navitas snaps up Australia and New Zealand pathway colleges

Buyer displays ‘confidence’ in Australasian student flows, as vendor exits region

March 1, 2023
Sale sign
Source: iStock

International education provider Navitas has announced its intention to buy pathway colleges at some of Australasia’s top-ranked universities, in a deal reflecting the company’s confidence in student flows Down Under – and the sometimes murky backstory of education business.

Navitas has signed an agreement to buy Taylors College Sydney, Taylors College Auckland and the University of Waikato College from the UK-based Study Group chain, which has partnerships with more than 50 universities in over a dozen countries.

The three colleges offer courses providing entry to the universities of Auckland, Sydney and Waikato. Navitas and Study Group promised a “seamless transition”, saying the colleges’ existing staff would be retained and the programmes would continue to be recognised as admission qualifications at each university.

The deal is subject to approval from competition and regulatory bodies.

Taylors is one of several highly regarded Study Group subsidiaries. However, the umbrella group ran into trouble with Australian authorities over some of its activities in the past decade.

The vocational education regulator, the Australian Skills Quality Authority (Asqa), cancelled Study Group Australia’s registration in 2018 over its involvement in the Vet Fee-Help training loan scheme. Asqa cited multiple shortcomings including misleading recruitment practices, insufficient resourcing, inadequate assessment and low completion rates.

The Tertiary Education Quality and Standards Agency (Teqsa) also took an interest in the group’s activities, imposing governance and academic integrity conditions on its registration in 2019.

In 2021, Teqsa revoked two of the conditions and extended Study Group’s registration until April of the following year, on the understanding that the organisation would “teach out” its existing courses and then close down its Australian higher education operations.

Charles Sturt University (CSU) also experienced regulatory problems over its partnership with Study Group, which ran the institution’s city campuses in Brisbane, Melbourne and Sydney. CSU did not renew its partnership with Study Group, which expired last year.

The group has closed its Australian headquarters and divested itself of local operations such as the Australian College of Physical Education, which outperformed every Australian public university in the most recent Student Experience Survey.

Navitas said it was “very comfortable” with Taylors’ operations and commercial viability. Chief executive Scott Jones said that while Navitas had weathered Covid-19 well, because its “diversified portfolio” included significant domestic operations, the pandemic had left Study Group with “less assets” than in pre-coronavirus days.

“You want to time any acquisition when it’s right. We looked at this for a while and it just made absolute sense. Timing was right; opportunity was right; complementary portfolio fit. When we acquire or partner with someone, the first thing [we ask ourselves is], can we collectively create a better brand?”

Mr Jones said his company had “massive confidence” in the Australia-New Zealand region. “We do a lot of work around data analytics and insights and student flows. Every region is exciting…but Australia has probably just now lifted its head slightly above the others in terms of the post-study work rights opportunities. It’s just a very attractive destination.”

Study Group’s Australasian operations are now limited to the partnership its online subsidiary, Insendi, maintains with the University of Melbourne.

Chief executive Ian Crichton said that the sale was “motivated solely by an excellent stand-alone commercial opportunity to fully focus on our university partnerships in the UK, Ireland and North America in the near term, develop new solutions that reflect the changing needs of our students and partners, and build a more balanced international education portfolio further out”.

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