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Pearson sells US K12 text book business – heads further digital

Pearson has sold it’s US K12 courseware business to Nexus Capital Management LP (Nexus).
The US K12 courseware business provides textbooks and instructional resources to help teachers and students at every stage of K12 learning in the United States.

Pearson say: ‘This disposal is an important part of our ongoing work to become a simpler and more efficient company, focused on fewer, bigger opportunities that contribute towards growth and our digital transformation. It will greatly simplify our ongoing technology, systems and office rationalisation.
The broader US K12 market remains an important area of focus for Pearson and we are continuing to invest in faster growing digital services such as virtual schools and building on our strong position in US student assessment. We will continue to provide Higher Education courseware for Advanced Placement programmes in K12 schools.’

Deal details: Pearson today completes another major milestone in its simplification programme with the announcement of the sale of its US K12 courseware business to Nexus Capital Management LP (Nexus) for headline consideration of $250m. Total proceeds comprise an initial cash payment of $25m and an unconditional vendor note for $225m 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. This additional consideration has been structured to provide Pearson with the potential to capture future upside in the US K12 courseware adoptions market over the coming years.

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.”

 

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