Less than two months after announcing one of the largest gifts in U.S. higher-education history, officials at a small liberal-arts college in Kentucky said Monday that its $250 million donation had been withdrawn by the A. Eugene Brockman Charitable Trust.
John Roush, president of Centre College, based in Danville, Ky., said the gift of stock in Universal
Computer Systems Holding Inc. was dependent on a recapitalization of the company, which operates as
Reynolds & Reynolds Co., and that the details of the endowment were too complicated to meet the deadlines for a deal last week.
"We are stunned as much as we are disappointed," said Mr. Roush, who noted that the gift would have roughly doubled the college's endowment.
The money was intended to create 40 full-ride scholarships each year starting in 2014 for students majoring in science and economics. Mr. Roush said the college, which has a total of nearly 1,400 students, would continue to pursue the proposed program.
The trust said it still intends to provide support to the school in the future. "There were all sorts of things we didn't anticipate and couldn't address in time," said Evatt Tamine, trustee of the Bermuda-based trust.
"Rather than rush into it, we decided to step back."
Based in Dayton, Ohio, Reynolds & Reynolds makes software for auto dealerships. Its owners—which include the late A. Eugene Brockman's son Robert, who is the company's chairman and chief executive, and Texas buyout firm Vista Equity Partners—tried unsuccessfully to sell the company, beginning last year. Then, the owners decided to recapitalize the company through a series of transactions that would have valued it at about $5.26 billion and resulted in the Centre College stock gift, Vista Equity said in July.
The company began a process this summer to raise about $4.3 billion in loans and bonds, according to credit-ratings firm Standard & Poor's. Billions of dollars in debt had been allocated to investors and pieces of it had even begun trading hands, but the company pulled the plug on the deal before the credit was funded, according to people familiar with the matter.
"We chose not to pursue the refinancing at this time," said Reynolds & Reynolds spokesman Thomas
Schwartz. "We have a lot of confidence in our financial strength and the flexibility it affords us in the future," he said.
Vista Equity didn't