Pearson offloads US course materials unit
Education publisher Pearson has sold its K12 course materials business in the US to private equity firm Nexus Capital for 250 million US dollars (£193.5 million).
The deal will see Pearson bank an initial cash payment of 25 million US dollars (£19.3 million), with the remainder to be paid over seven years.
K12 employs approximately 1,330 people and generated around £364 million in revenue and £20 million in profits in 2018.
But Pearson has constantly cited pressures in the US higher education business, which has dragged on its performance.
Money raised from the sale will be used for general corporate purposes, Pearson said, and boss John Fallon added that the deal will allow Pearson to focus on its “digital first strategy”.
Mr Fallon said: “School publishing in America has been an important part of Pearson for many years, and what it does matters to teachers and students across the country.
“We’re pleased to have found new owners who are committed to its future, and we wish it every success. The sale frees us up to focus on the digital first strategy that will drive our future growth.
“Through our assessment, virtual school, advanced placement and career and technical education programmes, we will still serve schools across America and we will now be better placed to focus on the areas in which we can best help their students to be successful in their studies and future careers.”
The group, which has been selling assets such as the Financial Times and The Economist, has been moving towards a focus on the education sector.
Mr Fallon’s programme also includes efforts to slash Pearson’s debt.
Pearson is also undergoing a cost-efficiency programme, with around £130 million of cost savings delivered in 2018 and more to come.