Pearson to acquire Global Education in China for $155m
By Marcus Leach
Pearson, the world’s leading learning company, is today (Monday) announcing that it has agreed to acquire Global Education and Technology Group, a leading provider of test preparation services for students in China who are learning English.
Global Education is listed on the NASDAQ stock exchange (NASDAQ: GEDU). Pearson has agreed to acquire the company for $155m in cash, comprised of a headline price of $294m or $11.006 per American Depository Share offset by an expected cash balance of $139m at closing. The acquisition is subject to the approval of Global Education’s shareholders and is expected to complete in the fourth quarter of 2011.
Global Education is a leading provider of test preparation services in China for students who are working towards internationally-recognised English language assessments. These tests are important to students who want to study outside China; to professionals who want to demonstrate their English skills to Chinese or international companies; and to academic institutions, corporations and governments as they evaluate admissions, employment and immigration applications. Pearson estimates that approximately 500,000 Chinese students take these tests each year, a four-fold increase over the past five years which has produced rapid growth in spending on related teaching and preparation services.
Founded in 2001, Global Education has built a network of approximately 450 test preparation and training centres across 60 cities in China. Approximately 115 of these centres are company-owned and the remainder franchised. It also has an online course delivery platform for students and professionals. In addition to its core English language test preparation services, Global Education also provides English language training for children, tutoring in a range of subjects and teaching for other foreign languages.
Global Education has produced substantial growth over the past five years and Pearson expects it to generate revenues of approximately $65m in 2011. Pearson expects the acquisition... continued on page two >