@VALUEZTV AM EDITION
After two years of searching, Wesley College has found a buyer — neighboring Delaware State University in Dover.
Delaware State University and the small liberal arts college have signed an acquisition agreement, starting a year-long process of Wesley being acquired by the state's only historically Black university, DSU and Wesley officials announced Thursday.
DSU will now become the first historically Black college or university to acquire another college.
Discussions between the two schools have been ongoing since March 2020, DSU President Tony Allen said in an email to the school community.
The agreement outlines that Wesley College will be fully absorbed by DSU by no later than June 30, 2021, officials said in a press conference on Thursday.
Because of financial uncertainties brought on by the COVID-19 pandemic, the agreement includes several contingencies, including:
Delaware State University must secure private or government funding to cover the acquisition. No existing revenue in the university's budget may be used to support the purchase.
The acquisition still requires approval from higher education accrediting bodies and the federal Department of Education, a process that could take about a year.
Wesley's budget, operating expenses and vendor contracts must be coordinated with DSU.
Over the next year, the colleges will continue to operate and be governed independently, as a transitional plan is finalized. The two schools will move forward addressing things like shared residence halls, potential consolidation of vendor contracts and staffing redundancies.
DSU has not yet made any decisions regarding hiring Wesley faculty members. There will be no changes made to athletic teams in the upcoming academic year, but the schools will discuss overlaps moving forward.
The final dollar amount of the acquisition is still being finalized, Allen said, but the university is seeking a three-year investment — either through public or private funds — to cover the purchase.
DSU does not plan to ask the state for funding to assist in the transaction, Allen said during the press conference.
Wesley has already faced years of financial uncertainty, relying on state funding and grants to keep doors open — and also drawing criticism from those who think a private college should not receive state higher education funding.
Since 2018, Wesley received $3.375 million in state funds, and was approved for up to $3 million on an as-needed basis in February. Since then, the school has accessed $1.8 million of that funding, a spokesperson for the state Office of Management and Budget said.
Earlier this year, the school nearly failed to secure the support of the five-member state panel responsible for doling out higher education investment funding, Sen. David Sokola, D-Newark, told The News Journal in February.
The school eventually received its final allocation of state dollars, meant to secure Dover jobs and ensure a school closure wouldn’t disrupt the education of Delawareans attending the school. The funding agreement required that the school submit weekly reports on the progress of its potential partnership, and barred the school from requesting any more funding from the state.
Wesley College has been seeking a partner or acquisition for about two and a half years now, after realizing its business model was not sustainable, said William Strickland, chair of the college's Board of Trustees.
Seeking pandemic relief, Wesley also received between $2 to $5 million in a forgivable federal loan from the Small Business Administration to “preserve” 372 jobs. The loan was approved April 13 by the college’s lender, the Wilmington Savings Fund Society.
The loan is fully forgiven if the college spends the money on payroll costs, interest on mortgages, rent and utilities. It is not yet clear how the acquisition affects the loan.
Wesley is not alone in its struggle to stay afloat financially. Small liberal arts colleges across the country continue to shut their doors or merge with other institutions as undergraduate enrollment declines.
Meanwhile, DSU has increased its enrollment by 40% over the past decade.
The acquisition of Wesley allows DSU to expand its existing campus off Route 13 to downtown Dover, adding 50 acres of land with 20 different academic halls, dorms, sports facilities and administrative offices along State Street.