Akron-based White Hat Management reportedly sold off management of 12 elementary charter schools Friday to an out-of-state, for-profit company that could acquire a third charter school company, an attorney for the charter schools’ public boards said.
The two deals would make Pansophic Learning the largest for-profit operator of Ohio charter schools, which has become a taxpayer-funded $1 billion private industry.
Pansophic is a Virginia company founded by Ron Packard.
Packard previously worked on mergers and acquisitions for Goldman Sachs and other large banks before getting into the for-profit education business by founding K12 Inc.
K12 runs Ohio Virtual Academy, one of the state’s largest online charter schools. State test scores show students learn less at Ohio Virtual Academy in a year’s time than at any of Ohio’s 3,444 traditional public and charter school options.
Pansophic has told the school boards that the curriculum used in Ohio Virtual Academy will be blended with classroom interaction at the elementary charter schools formerly run by White Hat.
White Hat, founded by Akron entrepreneur David Brennan, was one of the earliest for-profit school operators in the country. Early on, it dominated the Ohio charter school business, with Brennan taking an apartment a few blocks from the Statehouse and hiring a former governor’s aide, wielding influence in both the legislative and election processes.
White Hat still will operate an online school, Ohio Distance and Electronic Learning Academy, and 15 Life Skills centers that cater to high school dropouts.
The company has not responded to Beacon Journal questions regarding when it first spoke with Pansophic, whether parents and teachers have been notified, and about the academic and financial viability of its charter schools.
In Ohio, charter schools are supposed to be run by independent boards that decide how to operate the school. Hiring a manager is an option.
The independence, however, has been questioned.
In previous stories, the Beacon Journal has quoted some board members as saying they were recruited by White Hat officials.
The management company also owns much of the school real estate and other assets, sometimes through related companies, creating legal problems when boards have tried to fire White Hat.
It’s unclear if the assets will be sold, or just the contracts to operate the schools.
The contracts give the management company as much as 95 percent of state funding for the 12 schools, which are on pace to receive $26.4 million this year to educate 3,286 students.
In another potential deal, Pansophic — which also has not returned an email seeking comment — is looking to purchase management of other Ohio charter schools run by ?New York-based Mosaica Education, a global education company, said Amy Goodson, an attorney for the schools managed by White Hat.
“They’re talking about extending operations in Ohio,” said Goodson, who has been traveling the state visiting her boards and discussing the sale. “I’ve heard of that just because I’m in the grapevine,” she said of the Mosaica acquisition.
Goodson said the eight charter schools she represents are ready for a change from White Hat.
The company has produced poor academic results for most of its charter schools for more than 15 years.
“All of them are a positive. I don’t have any boards that are saying we have to fight this or push back on this,” she said.
White Hat CEO Thomas Barrett had notified the school boards and sponsors (two schools are sponsored by the state) on May 18 that the Akron-based company had been in talks with Pansophic. The deal will incrementally change the schools’ curriculum and promises to provide additional teacher support, Goodson said.
Jeff Kwitowski, spokesman for K12 Inc., said Ohio Virtual Academy’s low student growth score is due to the way Ohio penalizes schools that have high student mobility. Kwitowski said students often enroll in Ohio Virtual Academy because of a disruptive incident like bullying or divorce. After the situation calms, the student moves back to a brick-and-mortar school, he said.
The former White Hat boards say they are hopeful that adding human interaction to the online curriculum will produce better results than they or Ohio Virtual Academy have garnered in the past.
“The academics aren’t where the boards want them to be,” Goodson said. “I think they’re looking at this potential change in operation and curriculum as one way to help the academic performance.”
The schools would continue to pay the same management fee, but to Pansophic. There also has been no indication that teachers and staff will be let go, at least not at first.
“There was no discussion about employees, per se. The essence is that most will stay in place and as time goes on if people are not meeting expectations, as in any other circumstance, I assume they can be let go,” Goodson said.
Doug Livingston can be reached at 330-996-3792 or email@example.com. Follow on Twitter: @DougLivingstonABJ.