Pearson has agreed to increase its shareholding in Indian education business TutorVista to a controlling 76% stake for a consideration of $127m. Pearson acquired a minority stake in TutorVista in June 2009 and this transaction takes Pearson’s total equity investment in the company to approximately $139m.
TutorVista was founded in 2005 by Krishnan Ganesh and is headquartered in Bangalore. India’s government currently invests $40bn each year or three per cent of GDP in education, while Indian consumers spend more than $40bn on private educational institutions and services. Both segments of the market are growing rapidly as a result of government commitment to increase the quality of and access to learning opportunities as a means of sustaining economic growth and reducing poverty.
TutorVista will be integrated into the Pearson education business in India. Pearson expects the acquisition to enhance Pearson’s adjusted earnings per share and return on invested capital in 2012, its first full year.
Marjorie Scardino, Pearson’s chief executive, said: “TutorVista is an innovative and effective education company that we have worked with and respected for several years. This acquisition – which we believe is the largest transaction in education in India by any company – signals our excitement about the vitality of India’s education sector.”
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