Pearson agrees £163m sale of Italian and German courseware businesses
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Education firm Pearson has struck a deal to sell two European publishing businesses for just over $200million to Finland’s largest media company.
Sanoma Corporation has agreed to buy Pearson’s Italian and German K12 courseware divisions for £163million ($203million), and distribute its English Language teaching products in Italy.
The sale represents a further move by Pearson away from its traditional reliance on textbook sales and toward more focus on digital learning under the leadership of chief executive Andy Bird.
Transition: Pearson launched a strategic review of its international courseware operations in March 2021 amidst a decline in sales resulting from the move to online learning
Sanoma is a media powerhouse in Finland, where it runs the country’s biggest television channel and Scandinavia’s most popular daily broadsheet newspaper, along with multiple radio stations and magazines.
Listed on the Nasdaq Helsinki exchange, it has been expanding its educational operations in recent years through a series of acquisitions in countries including Netherlands, Norway and Spain.
Pearson launched a strategic review of its international courseware operations in March 2021 after sales were hammered by the move to online learning that was prompted by the coronavirus pandemic.
As part of that review, the FTSE 100 group has sold its COC and Dom Bosco businesses in Brazil for £108million (R$789million) last October to Arco Platform.
The disposal of these ‘strategic review businesses’ are expected to cost the firm between £15million and £20million in adjusted operating profits this year, though this will be heavily dependent on when transactions take place.
Pearson said it ‘continues to make good progress in the remaining areas of the strategic review and will provide a further update on this in due course’.
Rejected: Pearson has turned down three takeover proposals by private equity giant Apollo Global Management, including one valuing the group at £6.7billion
Following the announcement, Pearson shares were down 0.6 per cent to 746.4p during the late afternoon, although they have skyrocketed by more than a quarter in the past six months.
Shares in the business have received a massive boost this year following a series of takeover proposals by private equity giant Apollo Global Management.
All of Apollo’s offers have been rejected by Pearson’s senior management, including the most recent bid, which valued the group at around £6.7billion, on the grounds that it significantly undervalued the firm and its future prospects.
Following this latest offer, the London-based company reported underlying sales grew by 7 per cent in the first quarter thanks to demand expanding across most of its businesses, including its US testing and English language learning divisions.
That same day, it declared it had purchased education technology firm Mondly, which provides one of the world’s most downloaded language learning apps.
Andy Bird said: ‘Our acquisition of Mondly, one of the world’s leading online language learning platforms, is another exciting strategic development.
‘It strengthens Pearson’s direct to consumer strategy and supports our ambition to become the global leader in English language learning for committed learners.’
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