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The first merger in Australia between two Aboriginal Corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) was undertaken by RSM.
While the organisations had different purposes (one managing property and the other delivering community programs), they were individually unsustainable, so the purpose was to create a stronger combined entity.
Although never done before, the Act contained provisions allowing for mergers and Andrew was appointed special administrator by ORIC. He worked with the registrar, lawyers, board members, and community to develop a roadmap for the merger. This included getting one of the organisations up to speed, as it had not been functioning well before the merger.
After significant consultation and the development of a draft rulebook to provide clarity on future operations, the board achieved the required 75% agreement for the merger to proceed. This was followed by the incorporation of a new organisation, and submission of the rulebook to the registrar for sign off.
Assets and contracts were then transferred to the new entity including land titles, public housing, commercial office space, contracts with staff and accounts with suppliers. This was a complex process involving detailed consultation with government on funding and assets, alongside careful media management to assure the community of service continuity.
“The key lessons from this merger were engagement and flexibility. People fear the unknown, so you must take them on the journey or risk operational and reputational impacts. Especially in NFPs, emotion can run high during a merger. Try to keep a level head and focus on the best interests of the organisation. If it’s clear something isn’t working, don’t be afraid to pivot or take the time you need instead of rushing. A considered, well-planned merger has the best chance of success.”
This client story was taken from RSM’s Mergers and Acquisitions in the not-for-profit sector report. Download the full report here.
RSM Partner Andrew Bowcher has acted as Administrator, Investigator, Special Administrator, Examiner, Grant Controller and Advisor to over seventy different Aboriginal and Torres Strait Islander Organisations and Bodies and is an AICD Fellow (FAICD). Please feel free to connect for a confidential discussion tailored to your organisational needs.
