Pearson announced the $250 million sale of its K-12 courseware division to private equity group Nexus Capital Management, a sale which the company had been pursuing for at least a year as part of its simplification strategy. Chief executive John Fallon says it “frees us up to focus on the digital first strategy that will drive our future growth.” Nexus will pay just $25 million now, with the remainder due in an unconditional $225 million vendor note “expected to be repaid in three to seven years.” Thereafter, Pearson will continue to receive 20 percent of all future cash flows to […]
Education
Pearson’s January Trading Report: “There Is Still Much to Do”
Pearson issued their traditional January “trading report,” with highlight data in advance of a full annual report on February 22. It brings familiar news regarding 2018 performance: The company remains adept at cutting costs, but not yet at increasing revenue, as the declining US higher ed market continues to weigh on their prospects. US higher ed courseware is expected to be down 5 percent year on year, a greater decline than expected by analysts. Pearson expects that trend will continue through 2019 as the long digital transformation continues: “Expect US HECW revenue to be zero to down 5% as underlying […]
Barnes & Noble Education Shares Fall Hard On Poor Quarter
Barnes & Noble Education underperformed again, with second quarter sales falling 8.1 percent to $815 million, and investors headed straight for the door. Ninety minutes after the market opening, shares were down approximately 28 percent, to about $4.60 a share, which would be a new all-time low for the stock if it holds. (At that price, the market cap is around $209 million.) Sales at the College stores declined $54.4 million, with comparable store sales down 5.6 percent, “primarily due to lower textbook sales.” Sales from net new stores (new stores less closed stores) declined by $15.2 million, compared to an increase […]
Wiley Buys Learning House for $200 Million
Wiley announced Tuesday it has signed a definitive agreement to acquire education services provider Learning House from Weld North Holdings for $200 million in cash. The transaction is expected to close on or around November 1. The Louisville, KY-based Learning House provides online program management (OPM) services for colleges and universities, along with professional development services for teachers; and learning solutions for corporate clients. 2018 sales for the unit are expected to be roughly $70 million, up 17 percent from last year. Wiley ceo Brian Napack says in the announcement, “Learning House is a dynamic growth company and we are thrilled […]
Kaplan to Swallow Barron’s Test Books
Kaplan Test Prep has acquired key assets of longtime rival Barron’s Educational Series, including the test prep, study aid, and foreign language assets, as well as the Barron’s brand name. The acquisition comprises about 650 of Barron’s more than 2,000 titles, also including their reference, business, and law titles. As Newsday notes, “The purchase combines two of the oldest and best-known brands in educational services and test-prep books in a market that is becoming increasingly competitive.” Terms of the transaction were not disclosed. Following the merger, Kaplan’s new assets will still carry the Barron name, operating as a distinct brand. […]
Quarto Has Better Sales, Still with Big Loss; Bertelsmann to Buy OnCourse Learning
Quarto reported half-year results, with sales showing some improvement, as revenues rose $6 million to $56.2 million. Some of that gain reflects a shift in the “seasonal split of co-edition revenues, with a higher percentage than normal of expected full-year revenues achieved in the first half.” Their operating loss of ($7 million) was slightly improved from last year’s ($7.6 million), though the after tax loss of ($6.7 million) was higher than last year’s ($5.2 million), and is a poor result by any objective measure. The company’s lightly-traded stock is headed towards a new all-time low following the news. Though not […]