Tribal Group acquires International Graduate Insight Group

December 21, 2012 — Fusion DigiNet

TribalTribal Group, a provider of technology systems and solutions to the education, learning and training markets, is to acquire International Graduate Insight Group Limited (“i-graduate”), an education benchmarking and student experience research business.  The acquisition is expected to complete on 2 January 2013.

Tribal Group will pay n initial amount of £2.86 million on completion and up to a maximum of £7.5 million based on an earn out structure for the 3 year period ending 31 December 2015.  The unaudited profit before tax of International Graduate Insight Group Limited for the year ended 31 March 2012 was £423k and the value of gross assets at that time was £1,799k.

i-graduate is an independent benchmarking and analytics group, working in partnership with institutions and education organisations to provide evidence-based information on education experience and outcomes across higher education, further education and schools markets.  The business works with over 1,200 education institutions in 24 countries, receiving and analysing feedback from more than 1.3 million students of over 190 nationalities.  i-graduate will join Tribal’s Services business and will strengthen the Group’s evidence-based analytics offering.

i-graduate was founded in 2005 by Will and Lindsay Archer.  Will Archer will continue to lead the i-graduate business and will head up the integration of i-graduate’s offerings with Tribal’s existing financial benchmarking and analytic capabilities.

Tribal’s Chief Executive Officer, Keith Evans, commented: “Our strategic priority is to provide our customers with evidence based systems and solutions that will support the on-going improvement of educational outcomes.  Quantitative and qualitative technology based benchmarking and analytics is a cornerstone of the evidence base.  This acquisition will enable us to strengthen our capabilities in this exciting and emerging area, expands our product offering to our existing customers and provides increased access for our existing products to the i-graduate customer base, both in the UK and in our targeted international markets.”

UK, London

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Pearson acquires online learning business EmbanetCompass for $650M

October 16, 2012 — Fusion DigiNet

Pearson PLC has acquired EmbanetCompass from an investor group led by Technology Crossover Ventures and Knowledge Universe, for $650m in cash.

EmbanetCompass partners with leading non-profit colleges and universities in North America to provide online learning solutions for more than 100 university programmes. It provides a range of services including: programme design and development, marketing and student recruitment, faculty training and support, data-driven student retention and learning analytics; student services (counselling, tutoring, mentoring), technology support and launch funding.

Institutional services are one of the fastest growing areas of the US higher education market. Out of 6,700 degree-granting institutions in the US, approximately 175 institutions engage third-party vendors to power online programmes. Of a total post-secondary student population of 22 million, 2.5 million participate in purely online programmes with over 6 million taking at least one online course. Pearson believes the number of students learning online and the number of institutions serving those students will grow rapidly, as academic institutions seek low-risk and cost-effective ways to better serve new and existing customers by boosting student access, affordability, achievement and retention.

EmbanetCompass revenues have grown strongly in each of the last three years and are expected to be approximately $130m in 2012. The transaction is subject to a Hart-Scott-Rodino review. Pearson expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2014.

Will Ethridge, CEO of Pearson North America, said, “The acquisition of EmbanetCompass extends Pearson’s investment in two areas where we see great opportunities for growth and impact-online education and educational services.  The combination of Pearson and EmbanetCompass creates the premier provider of online learning and education services and will further enable us to advance the goals of the institutions and students we serve with innovative and proven programs.”

Founded in 1995, with locations in Chicago, Orlando, and Toronto, EmbanetCompass has 580 employees and is headed by Steve Fireng. He will stay on as CEO of EmbanetCompass and as a senior executive at Pearson.

UK, London & USA, Chicago, IL

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Wilmington Group reports full year results for the year ended 30 June 2012

September 18, 2012 — Fusion DigiNet

Wilmington Group plc, the professional information and training group, has announced its results for the year ended 30 June 2012.

Highlights

  • Adjusted EBITA increased by 10.2% to £16.5m (2011: £14.9m)
  • Adjusted EBITA margins improved to 19.3% (2011:17.8%)
  • Adjusted Profit before Tax up 4.6% to £14.0 million (2011: £13.4 million) on revenues up 1.8% to £85.3m (2011: £83.8m): statutory profit before tax increased by 4.1% to £6.3m
  • Publishing & Information revenues from the higher margin online/digital business have increased to 76% (2011: 72%), with print decreasing to 11% (2011: 16%)
  • Continued strong cash generation, with 109% (2011: 111%) cash conversion of operating profit
  • Net debt £3.8m lower at £36.2m (2011: £40.0m)
  • Planned sale of surplus freehold property
  • Exited contract directory publishing
  • Proposed final dividend of 3.5 pence per share, making a full year maintained dividend of 7.0 pence per share

Mark Asplin, Chairman, commented: “As part of our transition to a higher margin better quality business, a number of major operational challenges have been successfully addressed during the year.  The result is a more streamlined, focussed and profitable business.

The legal training business is now more profitable and in better shape than it was twelve months ago, although market conditions affecting our client base remain difficult.  The phasing out of legacy publishing products will continue during the current year as the Group continues to invest in subscription based digital products and migrates its business away from print directories and services in which it does not own intellectual property. We expect the remainder of our core businesses to continue to show growth. We are also pleased with the progress we are making towards achieving our medium term financial targets.”

Full details of the results and an investors presentation are available here.

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A Fusion Deal: Econsultancy sold to Centaur

July 10, 2012 — Fusion DigiNet

Fusion Corporate Partners are pleased to announce our latest deal, the sale of Econsultancy.com Limited to business information and events group Centaur Media plc.

Econsultancy is a leading digital and events-led information provider to the global digital marketing and e-commerce community in the UK, with a growing presence in the USA, Middle East, Asia and Australia. Econsultancy’s revenues stem from subscriptions, events, training, professional qualifications and media. The company has approximately 110,000 registered users and approximately 5,000 subscribers.

Centaur are paying an initial consideration of £12m in cash, with deferred consideration of up to £38m due in 2016, based on EBITDA performance for the year ending December 2015.

Econsultancy was founded in 1999. In the financial year to 31 December 2011, Econsultancy reported revenues of £6.6m (representing an increase of 50 per cent. on the prior period) and adjusted EBITDA of £1.1m. Econsultancy’s CEO and key executives will remain with the business following the acquisition

The acquisition is a key part of the strategy to transform the Centaur Group into a predominantly digital and events-led business. The deal complements Centaur’s market-leading publications, events and digital services in the marketing, design and creative sectors.

Geoff Wilmot, Centaur Chief Executive, said, “The earnings enhancing acquisition of Econsultancy provides us with an exciting opportunity to acquire a leading information brand in a high growth sector with global potential which fits well with Centaur products including Marketing Week and New Media Age. Econsultancy is highly complementary with Centaur and gives us a prominent position in the rapidly growing digital marketing sector with the opportunity to scale internationally. We see considerable potential for collaborative growth through leveraging our existing position in marketing and the development of high value, paid-for information services.”

Paul Slight, Director at Fusion, said, “We were delighted to work with the team at Econsultancy. The company has become the leading source of independent advice and insight on digital marketing and ecommerce. It will be an excellent fit with Centaur products.”

UK, London

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OTHER FUSION DEALS:

Media and Information

Business Services
Events, Broadcast and Other deals
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Pearson acquires GlobalEnglish for $90M

May 25, 2012 — Fusion DigiNet

Pearson has acquired GlobalEnglish for $90 million in cash.

Founded in 1997 in California, GlobalEnglish is a leading provider of cloud-based, on-demand Business English learning, assessment and performance support software. It serves more than 450 corporate customers, including 20 per cent of the Forbes Global 2000 companies, including General Electric, HSBC, Tata Consultancy Services and Unilever. Its product suite is uniquely suited to serve the needs of global professionals with a comprehensive offering – formal Business English learning coursework, informal and social learning capabilities, performance support tools, an enterprise collaboration platform, a mobile app, assessments and a premium one-on-one coaching service. GlobalEnglish’s Business English content is also entirely focused on the application of Business English to real life business situations such as composing emails and participating in conference calls, and its efficacy is highly rated by global companies and their employees. Approximately 75 per cent of GlobalEnglish’s more than 200,000 active subscribers are in fast growing economies in Latin America and Asia.

GlobalEnglish complements Pearson’s adult English language training business, Wall Street English, by enabling Pearson to expand more rapidly into the corporate market with cost-effective and scalable cloud-based Business English software solutions and to offer the world’s pre-eminent companies a full suite of relevant products and services.

In 2011 GlobalEnglish generated revenues of approximately $42m with high renewal rates. The company has more than 200 employees across more than 20 countries and has product development offices in Silicon Valley (USA), India and Korea. Pearson will be expensing integration costs relating to GlobalEnglish in 2012 and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013, its first full year.

John Fallon, Chief Executive of Pearson’s International education business, said, “The rise of English as a global language of business continues. This acquisition enables Pearson to play a much more systematic role in meeting the need of major companies around the world for quality, effective, scalable and relevant English language learning. We can combine services, technology, brands and content from across the Pearson family with the GlobalEnglish product portfolio to enrich the learning experience and enhance further the effectiveness of the teaching.”

UK, London &  USA, Silicon Valley, CA

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Pearson acquires Certiport for $140M

May 19, 2012 — Fusion DigiNet

Pearson has acquired Certiport from Spire Capital Partners for $140m in cash.

Founded in 1997 in Utah, Certiport develops, markets and distributes certification exams and practice tests of IT and digital literacy skills. It is a leading provider of foundation-level certification programmes for Microsoft, Adobe, HP, Intuit and other renowned technology companies. Certiport sells its certifications and assessments through a network of 12,000 testing centres operated by 70 partners in more than 150 countries. The network delivers approximately 225,000 examinations in 27 languages every month.

The acquisition extends the product range and geographic reach of Pearson’s professional testing business, Pearson VUE. Certiport’s foundation-level services complement Pearson VUE’s strong position in certifications and assessments for established technology professionals. Certiport also supports Pearson VUE’s expansion in fast-growing international markets, generating more than 60% of its revenues outside North America with particular strength in Asia and the Middle East. By providing access to Pearson’s content, assessment and test preparation services, the two companies intend to develop and enhance the range of services that Certiport offers to its customers.

Certiport generated revenues of $48m in 2011. It is a fast-growing company, increasing revenues at a compound annual rate of more than 20% over the past three years. Pearson will expense integration costs relating Certiport in 2012 and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013, its first full year.

Rona Fairhead, chief executive of Pearson’s professional education businesses, said, “Certiport is a high-quality company serving the significant demand for foundation IT skills. That need is growing fast and is truly international. The combination of Pearson VUE and Certiport will strengthen both businesses and will give us a unique portfolio of technology assessments and certification, serving everyone from a basic word-processing users to technology experts.”

UK, London & USA, American Fork, UH

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72% rise in profits at Pearson

February 28, 2012 — Fusion DigiNet

Pearson Plc has reported 2011 Preliminary results.

 

Financial performance

  • Sales up 6% at CER in spite of tough trading conditions in many markets.
  • Adjusted operating profit up 12% to £942m with growth in all businesses.
  • Adjusted EPS up 12% to 86.5p (headline growth).
  • Cash conversion remains strong at 104%; operating cash flow of £983m (£1,057m in 2010, which benefited from an unusually high working capital contribution).
  • Return on invested capital of 9.1%, above Pearson’s cost of capital; ROIC lower than in 2010 largely due to significant acquisition spend and higher cash tax.

Growth markets

Digital revenues up 18% in headline terms to £2bn, now 33% of Pearson’s sales. Substantial digital growth in all parts of Pearson including:

  • Students using digital learning programmes up 23% to 43m.
  • Penguin eBook revenues up 106%; now 12% of total Penguin revenues.
  • FT digital subscriptions up 29% to 267,000; approximately 44% of total paid circulation.

Developing markets revenues up 24% in headline terms to $1bn ($834m in 2010), now 11% of Pearson’s sales.

Other highlights

  •  Operating margins reach 16.1% (up 1.0% points)
  • £896m invested in acquisitions including Schoolnet and Connections Education in North America and Global Education in China.
  • Balance sheet net debt of £499m – approximately £1bn of headroom available for bolt-on acquisitions.
  • Dividend raised 9% to 42.0p, representing Pearson’s 20th consecutive dividend increase.

Outlook

  • Pearson expects to achieve continued sales and operating profit growth in 2012, in spite of tough trading conditions and rapid industry change.
  • Revenues from digital and services businesses expected to exceed revenues from traditional publishing businesses in 2012.

Marjorie Scardino, chief executive, said: “The external environment provides a testing backdrop for these results, and all our industries face some degree of turbulence. But our strategy and long-term planning for change have helped us to another good year to add to our record of persistent out-performance. We believe those qualities, combined with the commitment and innovation of our people, will continue to serve our customers and our shareholders well.”

Financial summary

£ millions

2011

2010

Headline growth

CER growth

Underlying growth
Business performance
Sales

5,862

5,663

4%

6%

1%
Adjusted operating profit*

942

857

10%

12%

7%
Adjusted earnings per share

86.5p

77.5p

12%

Operating cash flow

983

1,057

(7)%

Free cash flow

772

904

(15)%

Free cash flow per share

96.5p

112.8p

(14)%

Return on invested capital

9.1%

10.3%

(1.2)% pts

Net Debt

499

430

(16)%

Statutory results
Sales

5,862

5,663

4%

Operating profit

1,226

743

65%

Profit before tax

1,155

670

72%

Basic earnings per share

119.6p

161.9p

(26)%

Cash generated from operations

1,093

1,169

(7)%

Dividend per share

42.0p

38.7p

9%

* Continuing operations

Divisional analysis

£ millions

2011

2010

Headline growth

CER growth

Underlying growth
Sales
North American Education

2,584

2,640

(2)%

1%

(1)%
International Education

1,424

1,234

15%

15%

4%
Professional

382

333

15%

17%

2%
FT Group

427

403

6%

8%

7%
Penguin

1,045

1,053

(1)%

1%

1%
Total

5,862

5,663

4%

6%

1%
Adjusted operating profit
North American Education

493

469

5%

9%

8%
International Education

196

171

15%

13%

2%
Professional

66

51

29%

31%

10%
FT Group

76

60

27%

22%

17%
Penguin

111

106

5%

8%

8%
Total continuing

942

857

10%

12%

7%

Read the full announcement

UK, London

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Pearson to sell 50% stake in FTSE to the London Stock Exchange for £450 million

December 15, 2011 — Fusion DigiNet

Pearson has agreed to sell its 50% stake in FTSE International Limited to the London Stock Exchange Group for £450 million in cash.

FTSE is a world-leader in the creation and management of more than 200,000 equity, bond and alternative asset class indices. With offices in London, Frankfurt, Hong Kong, Beijing, Shanghai, Madrid, Milan, Mumbai, Paris, New York, San Francisco, Sydney and Tokyo, FTSE works with partners and clients in 80 countries worldwide.

Marjorie Scardino, Pearson’s chief executive, said: “FTSE is a bellwether of global financial markets and a world-class business. We have enjoyed supporting the company’s excellent and highly professional team to build the business. Proud as we are of that long association, FTSE’s strategy is different from our own. We wish it every success as we continue to build our digital business information services around the Financial Times.”

Pearson and London Stock Exchange Group currently each own 50% of FTSE. Under the terms of the agreement, London Stock Exchange Group will acquire from Pearson the 50% of FTSE that it does not own and continue to use the FTSE name. The transaction is expected to close by the first quarter of 2012.

In 2010, FTSE reported total revenues of £98.5 million and total EBITDA of £40 million. At 31 December 2010, FTSE had gross assets of £100.8m.

Pearson expects FTSE to make a total post-tax contribution to Pearson’s adjusted earnings of approximately £18 million or 2.2p per share in 2011.

The transaction follows the sale of Pearson’s stake in Interactive Data last year for $2bn. It marks Pearson’s exit from companies that are primarily providers of financial data and strengthens the FT Group’s focus on global business news, analysis and intelligence, increasingly delivered through subscription models and digital channels.

Pearson intends to use the proceeds of the sale to support and accelerate its strategy, investing in its businesses both organically and through acquisitions of companies with complementary content, technology and geographic exposure. In recent years Pearson’s organic investments have enabled it to gain share in many of its markets. The company has also made a series of bolt-on acquisitions (including vocational training companies in the UK, global business intelligence through Mergermarket, universities in South Africa, online learning businesses in North America, language schools in China and school systems in Brazil) which have rapidly enhanced Pearson’s earnings and return on invested capital.

UK, London

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Sanoma acquires Tammi Learning and Bonnier Utbildning AB from Bonnier / Bonnier acquires Werner Söderström from Sanoma

October 6, 2011 — Fusion DigiNet

Sanoma has acquired the assets of the Finnish educational publisher Tammi Learning and all the shares of the Swedish educational publisher Bonnier Utbildning AB from the Swedish media group Bonnier AB.

At the same time, Sanoma has sold the shares of its Finnish general literature publisher Werner Söderström Ltd. (WSOY) to Bonnier. The transaction of WSOY is subject to the approval of the Finnish competition authorities. The closing of the transaction is expected during the autumn.

Currently Sanoma has learning operations in Finland, the Netherlands, Belgium, Hungary, Poland and Russia. The total net sales of Sanoma’s learning business were EUR 249 million in 2010. This transaction is in line with Sanoma’s strategy to focus its operations and to concentrate on consumer media and learning solutions.

“Learning solutions are one of Sanoma’s key focus areas. These transactions are logical steps for us as they support our ambition to grow this business and focus our operations” says Harri-Pekka Kaukonen, President and CEO of Sanoma.

“We are delighted with this transaction which brings us to the Swedish learning market and strengthens our Finnish learning business. Both Bonnier Utbildning and Tammi Learning are excellently performing learning companies, which extend well our portfolio” says Jacques Eijkens, CEO of Sanoma Learning & Literature.

On the acquisition of WSOY Maria Curman, CEO of Bonnier Books, said.”Our ambition is to provide WSOY, its authors and employees, the means needed to reach their full potential. WSOY together with Tammi forms a perfect match within the Bonnier publishing family. I see this as an important step in successfully developing our offering of general literature to the Finnish market.”

In 2010, net sales of Tammi Learning, Bonnier Utbildning and WSOY General literature were EUR 10.2 million, EUR 17.6 million and EUR 32.5 million, respectively. Tammi Learning and Bonnier Utbildning employed some 80 people (FTE) and WSOY General Literature some 100 people. The transaction is estimated to improve Sanoma’s profitability from 2012 onwards.

Following the transaction with Bonnier, the net sales of Sanoma Learning & Literature in 2011 are estimated to be at the previous year’s level and operating profit excluding non-recurring items is expected to decrease somewhat. Previously, the net sales of Sanoma Learning & Literature were estimated to increase slightly and operating profit excluding non-recurring items was expected to be at the previous year’s level. Learning business has a strong seasonality within the year, the first and fourth quarter being typically loss-making. For general literature, on the other hand, the fourth quarter is typically the strongest one. Due to this seasonality, this transaction will lower Sanoma Learning & Literature’s fourth quarter result in 2011.

Finland, Helsinki & Sweden, Stockholm

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Chegg is to acquire Zinch

September 17, 2011 — Fusion DigiNet

Chegg is to acquire Zinch, a business that connects prospective college and graduate students to scholarships, admissions officers and other students who have been through the same process. Terms of the deal were not disclosed. The acquisition is expected to be completed by the end of this month.

The acquisition of Zinch, with over 3.5 million members, $1.9 billion in scholarships and over 5,000 school profiles, significantly expands Chegg’s customer base and its social education platform.

“Our mission has always been to save students time, money and help them get smarter,” said Dan Rosensweig, president and CEO of Chegg. “With our acquisition of Zinch, we’re extending our mission to high school students through the $7 billion college recruiting market, while continuing to break down the barriers of a college education, from the high cost of tuition and textbooks to helping students make money, pick their courses and get the academic help they need.”

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