Pearson, the giant international corporation based in England, is planning to invest two billion newly available dollars in the education business, according to recent company announcements.
On July 23, Pearson announced the sale of the Financial Times for £844 million in cash. August 12 Pearson announced its agreement to sell its 50% stake in The Economist for £469 million also in cash.Together the two sales remove Pearson from the newspaper business. They also infuse the company with 1.3 billion British pounds, or just over $2 billion in U.S. dollars. Cash.
Corporate statements issued in conjunction with both sales declared that “proceeds will be used by Pearson for general corporate purposes and investment in its global education strategy.”
“Pearson is now 100% focused on our global education strategy,” chief executive John Fallon said in the August 12 statement. “The world of education is changing rapidly and we see great opportunity to grow our business through increasing access to high quality learning globally.”
Pearson will now be 100% focused on our global education strategy. The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally. — quote attributed to chief executive John Fallon in July 23 statement
Pearson is now 100% focused on our global education strategy. The world of education is changing rapidly and we see great opportunity to grow our business through increasing access to high quality learning globally. — John Fallon in August 12 statement
Investors, Speculation, Other News
Following this announcement, however, the Financial Times suggested that Fallon “may be disappointed” in investors’ response to the narrower focus, noting that Pearson shares have fallen by one-fifth since March. The article goes on to discuss opposition to the Common Core and related testing, big business for Pearson, as well as other market factors. (See “Pearson Investors Wary of Acquisitions.”)
Meanwhile, in late July Reuters reported that Blackboard, a U.S. based software company focusing on learning tools for high school and universities, hired an auction house to sell the enterprise, with valuation up to $3 billion. Several ed tech observers, including Jeff Young at the Chronicle of Higher Education, speculate that Pearson may be interested in the purchase and now has the cash on hand.
The Austin Statesman reported in late July that Pearson was laying off over 200 employees due to loss of a Texas contract.
The Duluth News Tribune reported on August 3 that “Pearson will compensate the Minnesota Department of Education with nearly $6 million in fee reductions and services after glitches that led to statewide testing suspension twice last spring.”
On the legal front, a New Mexico judge dismissed an appeal regarding the state’s testing contract with Pearson, which had claimed that the state provided a noncompetitive agreement to Pearson.
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