TIDMPSON
RNS Number : 4348S
Pearson PLC
21 November 2011
Press release
21 November 2011
Pearson to acquire Global Education in China for $155m
Pearson, the world's leading learning company, is today
announcing that it has agreed to acquire Global Education and
Technology Group, a leading provider of test preparation services
for students in China who are learning English.
Global Education is listed on the NASDAQ stock exchange (NASDAQ:
GEDU). Pearson has agreed to acquire the company for $155m in cash,
comprised of a headline price of $294m or $11.006 per American
Depository Share offset by an expected cash balance of $139m at
closing. The acquisition is subject to the approval of Global
Education's shareholders and is expected to complete in the fourth
quarter of 2011.
Global Education is a leading provider of test preparation
services in China for students who are working towards
internationally-recognised English language assessments. These
tests are important to students who want to study outside China; to
professionals who want to demonstrate their English skills to
Chinese or international companies; and to academic institutions,
corporations and governments as they evaluate admissions,
employment and immigration applications. Pearson estimates that
approximately 500,000 Chinese students take these tests each year,
a four-fold increase over the past five years which has produced
rapid growth in spending on related teaching and preparation
services.
Founded in 2001, Global Education has built a network of
approximately 450 test preparation and training centres across 60
cities in China. Approximately 115 of these centres are
company-owned and the remainder franchised. It also has an online
course delivery platform for students and professionals. In
addition to its core English language test preparation services,
Global Education also provides English language training for
children, tutoring in a range of subjects and teaching for other
foreign languages.
Global Education has produced substantial growth over the past
five years and Pearson expects it to generate revenues of
approximately $65m in 2011. Pearson expects the acquisition to be
broadly earnings neutral in 2012, its first full year, including
integration costs. From 2013, Pearson expects the acquisition to
enhance adjusted EPS and to generate a cash return on invested
capital above Pearson's weighted average cost of capital.
The acquisition of Global Education supports the development of
a broad-based English language teaching business, combining Global
Education with Pearson's English teaching resources and
technologies and its existing networks of English language centres
for professionals (Wall Street English) and children (Longman
Schools). It expands Pearson's reach in China from eight cities to
60, and provides a platform to develop beyond English language
teaching.
John Fallon, Chief Executive of Pearson's International
education business, said: "We are already helping to meet the huge
demand in China to learn English by teaching growing numbers of
professionals and younger children. This acquisition gives us the
opportunity to help high school graduates gain the English
qualifications they need to progress to university and achieve
their own personal goals. Through organic investment and
complementary acquisitions, we're learning a lot about the very
significant growth opportunities we see in China and about the
value of combining our content and technology with high-quality
school networks. We are impressed by Global Education's commitment
to its students and working together we can enhance further the
quality of the teaching. It also significantly extends our scale,
geographic breadth and range of education in the fastest-growing
English language teaching market in the world."
ENDS
For more information:
Luke Swanson / Simon Mays-Smith / Charles Goldsmith +44 (0)20 7010 2310
This information is provided by RNS
The company news service from the London Stock Exchange
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