Pearson Sells Off Wall Street English, Vows to Focus on Other Ed. Opportunities
Pearson is selling off a major program for teaching English to adults, a $300 million transaction that is part of an effort to streamline the corporation’s operations and focus on other aspects of its education business.
The sale of Wall Street English will result in about $100 million in debt relief for Pearson, the company said in an announcement. Taxes and transaction costs will consume another $50 million of the sale, and $150 million will be retained in the business that has been sold.
“The sale of Wall Street English is part of our continued effort to focus on a smaller number of bigger opportunities in global education and to become simpler and more efficient,” said Pearson CEO John Fallon in a statement.
The move is part of a broader goal by the worldwide corporation, which has struggled over the past few years, to move away from large-scale direct delivery services. Jettisoning Wall Street English fits with the company’s goal to simplify its operations and focus on “fewer, bigger opportunities,” Pearson officials said in the announcement.
Pearson says that Wall Street English served 180,00 individuals and had 70 corporate-owned centers in China. The program had nine centers in Italy and 321 franchised centers across 27 territories. It had £175 million in revenue, an adjusted operating profit of £7 million. Wall Street English has an estimated 3,600 employees.
Pearson, which has 35,000 employees working in 70 countries, has weathered a series of big financial hits over the past few years.
In February, the company announced a $3.4 billion pretax loss it linked to a writedown on the value of its North American business, and stock prices fell in the period after.
In August, the company said it would eliminate 3,000 full-time equivalent employees by the end of 2019—with a focus on cutting managerial positions. That amounted to just over 9 percent of its workforce at the time. It followed a 10 percent reduction announced in January 2016.
Wall Street English is being taken over by a consortium of buyers affiliated with Baring Private Equity Asia a private equity firm, and CITIC Capital Holdings Limited, which describes itself as an alternative investment management and advisory company. CITIC says it manages more than $22 billion of capital across 100 funds and products.
In August, Pearson announced the sale of another English-language training program, Global Education, to Puxin Education for $80 million.
Global Education provides language skill and test-prep for Chinese students wanting to study abroad—traditionally, a big area of demand in the Asian country and many other regions
The operation served 64,000 learners and had revenues of £78 million and an adjusted operating loss of £4 million, Pearson said at the time.
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