Pearson to Sell PowerSchool, Cites Shift Away From Management Systems
The global education corporation Pearson is selling its large-scale provider of student information systems, PowerSchool, in a deal with a private equity firm worth $350 million.
Pearson has made no secret of its intention to push PowerSchool out of its portfolio. It found a buyer in Vista Equity Partners, a U.S.-based company which will pay cash in the transaction, announced this week. The deal, which is expected to close in the third quarter of this year, also includes the acquisition of other Pearson SIS systems, including PowerSchool SMS, Gradespeed, and eSIS Forms.
PowerSchool is the most widely-used online student information system in North America, Pearson says, and serves 15 million students in 73 countries.
In a statement, the London- and New York-based corporation’s CEO John Fallon described the sale to Vista Equity Partners as part of a broader shift in Pearson’s philosophy and business strategy, one meant to focus more on student academic improvement, rather than school-management platforms.
“The sale of PowerSchool, an administrative system rather than a tool for learning, teaching, or assessment, will enable us to focus more directly on learning outcomes, and further simplify Pearson as we make our products more global, digital, and scalable,” Fallon said.
Last month, Pearson cited similar recasting of its model in announcing the sale of its Family Education Network, an “edu-tainment” platform, to British investment company Sandbox Partners. A spokesman for Pearson at the time said that the sale signaled a desire to “focus on the Pearson products and services with the biggest potential impact on learning outcomes.”
Pearson, which employs an estimated 70,000 employees in 40 nations, has a vast reach. Among the many products and services in its fold are virtual education, academic content delivered online and in print, and assessment services. In the United States, the company has recently been engaged in a number of high-profile fights to win lucrative state-testing contracts.
It has also been much pilloried by critics who question the quality of the corporation’s products and its influence. Recently, Pearson has come under harsh scrutiny in the Los Angeles Unified school system, where a curriculum that was supposed to be embedded on Apple iPads provide as part of the district’s massive, troubled online technology project was described by district officials as incomplete.
Pearson officials have said they stand by the quality of their product, but district officials have said they will seek a refund of the cost of the licenses of the curriculum.
Deal in Focus
Last year, state and district officials in North Carolina voiced strong complaints about PowerSchool, citing problems such as inaccurate student transcripts and hurdles for teachers trying to enter grades. Charlotte-Mecklenburg’s superintendent referred to the rollout of the system, the implementation of which was reported as costing $7.1 million a year, as a “train wreck.”
Pearson acquired PowerSchool from the Apple in 2006, in a move that was billed at the time as strengthening the company’s hold as a leading provider of student information systems.
But priorities change. Pearson has publicly described its intention to sell PowerSchool in a public financial report released in February, saying that it was exploring the sale of its other student information system businesses, too. The company estimated that PowerSchool had $97 million in revenues and $20 million in operating income.
Vista Equity Partners, which has offices in Austin, Chicago, and San Francisco, estimates it has $14 billion in cumulative capital commitments, focused on software, data, and technology.
Robert F. Smith, the chairman and CEO of Vista Equity Partners, said PowerSchool has “an impressive track record of delivering innovative, mission-critical products that serve the diverse needs of educators, parents, and students around the globe.”