Aspire and NorthPointe Resources: A Synergistic Asset Acquisition
In 2018, the CEO of NorthPointe Resources, Dina Donahue-Chase, was facing a difficult decision. The business environment for her social services nonprofit, serving 500 people with developmental disabilities in north suburban Chicago, had changed dramatically. With an annual revenue of almost $6M, government contracts had been flat or declining for some time, and fundraising activities were not able to make up the difference. Dina knew that she needed to do something, and increasingly that “something” felt to her to be a merger. Dina knew that if the board moved quickly, NorthPointe Resources would have a lot to contribute to another nonprofit. If they picked the right one. Increasingly, Dina believed that a coming together of two organizations made a lot of sense.
At the same time Jim Kales, Aspire’s CEO, and Board of Directors were discussing how to best grow their innovative nonprofit organization and help even more people with developmental disabilities. Aspire was already working on organic growth initiatives, including strategic plans around sustainable and innovative programs. Looking at the numbers, Aspire’s next move became clear — inorganic growth strategies like M&A in tandem with organic initiatives made smart business sense. Aspire would grow financially stronger, share best practices and serve even more people with an alliance.
In 2018, Dina began reaching out to nonprofit organizations that she felt had good synergies with NorthPointe Resources. At the suggestion of Jean Butzen, M+S Consulting, Dina contacted Jim Kales at Aspire. Based in Chicago’s western suburbs with annual revenues of almost $11M, Aspire is a leading agency helping 1,000 children, adults and their families each year.
Jim and Dina compared notes over several meetings and realized that their agencies had amazing complementary strengths: 125 combined years of history, recognized for program quality, an entrepreneurial spirit, and most importantly their shared vision of inclusion. Dina and Jim believed joining forces put both organizations in the best possible position to build on their founders’ legacies and grow their mission of building more inclusive communities that welcome people of all abilities.
By January 2019, the boards signed a letter of intent to negotiate a strategic alignment, and launched a Joint Negotiating Committee (JNC) to prepare a “case statement,” facilitated by Mission + Strategy Consulting. The boards identified an ambitious vision and specified the following short-term goals: regional growth, financial and operational synergies, and team member opportunities for career and professional growth.
Negotiations between the two boards moved quickly. After the case statement was approved by the boards, the organizations then prepared a term sheet, facilitated by Mission + Strategy Consulting. Key negotiation issues included: governance, finance/technology, human resources, a fully integrated budget, and marketing/communications. When the term sheet was completed, each board voted to approve it, along with the integration budget. While the negotiating committee prepared the term sheet, the attorneys for each party completed due diligence, followed by preparation of the legal documents for closing.
The parties closed on their alliance as an Asset Transfer from NorthPointe Resources to Aspire, with an effective date of Aug. 1, 2019. In all there were fewer than 10 layoffs among Aspire's and NorthPointe Resources' employees, comprised primarily of administrative function positions. Today, the combined organization has 282 employees with annual revenue of nearly $17M. Jim retained his position of CEO, and Dina is now Aspire’s chief mission officer. To preserve NorthPointe Resources’ legacy, they maintained the current branding in the short term. Over the first year, they will thoughtfully transition NorthPointe Resources to the Aspire brand and name.
It was eight months’ time from the date the boards signed a letter of intent until they closed and launched their alliance. These partners came together not only to become one of the most recognized and respect disability service providers across the Chicago metropolitan area, Lake County (Illinois), and southeastern Wisconsin. Together, they will continue to build a culture of inclusion that transforms the community.
Ultimately, Aspire and NorthPointe Resources are better together.