Belfast Telegraph

Pearson sells teaching unit to private equity

Wall Street English operates 70 teaching centres in China, nine in Italy and has 321 franchised centres across 27 territories.

Troubled education group Pearson is to offload its language teaching unit Wall Street English to private equity firms Baring and Citic Capital for 300 million dollars  (£225 million).

Wall Street English operates 70 teaching centres in China, nine in Italy and has 321 franchised centres across 27 territories.

The move comes after Pearson said in February that it is exploring strategic options to shift away from large-scale direct delivery services as it looks to bulk up its balance sheet.

Pearson said the deal will see a 100 million dollar improvement in its net debt position as around 150 million dollars of operating cash will be retained in the disposed business.

Wall Street English contributed £175 million to Pearson’s revenue last year and booked an adjusted operating profit of £7 million and a statutory operating profit of £4 million.

The teaching unit had approximately 3,600 full time employees at the end of June and the deal is expected to close in the first half of 2018, subject to regulatory approval.

Pearson chief executive John Fallon said:  “The sale of Wall Street English is part of our continued effort to focus on a smaller number of bigger opportunities in global education and to become simpler and more efficient.”

The sale follows a string of recent profit warnings and a record £2.6 billion full year loss in February for the former Financial Times owner.

It also comes after Pearson offloaded a 22% stake in its publishing unit Penguin Random House to Germany’s Bertelsmann for around 1 billion dollars (£761 million) last month.

The proceeds of that sale will be used to help fund a £300 million share buyback programme, and allow the company to strengthen its balance sheet and invest in its digital transformation.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.

Popular