Pearson to sell its US K12 courseware business to Nexus Capital Management for $250M

February 18, 2019 — Fusion DigiNet

Pearson LogoEducation business Pearson has agreed to sell its US K12 courseware business to alternative asset investment management company Nexus Capital Management LP for $250 million, made up of an initial cash payment of $25 million plus an unconditional vendor note for $225 million expected to be repaid in three to seven years. Following the repayment of the vendor note, Pearson is entitled to 20% of all future cash flows to equity holders and 20% of net proceeds in the event the business is sold.

Pearson’s US K12 courseware business provides textbooks and instructional resources to help teachers and students at every stage of K12 learning in the United States.  It employs approximately 1,330 people. It had gross assets of £648 million and net assets of £75 million as at 31 December 2018 and generated around £364 million of revenue and approximately £20 million of adjusted and statutory operating profit in 2018. The transaction is expected to complete at the end of the first quarter of 2019.

John Fallon, Pearson’s chief executive, 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.”

UK, London & USA, Los Angeles, CA

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