Pearson steps up push into online schooling

Financial Times – Andrew Edgecliffe-Johnson

Pearson has announced its second-largest acquisition since selling the IDC financial data business in 2010, with a $400m cash offer for Connections Education, an operator of online-only US public schools. The deal represents the latest move by Pearson, which also owns the Financial Times, to change its education business from a print textbook publisher into a supplier of digital learning materials and educational services, selling direct to students and parents, as well as to state school bodies. It released no details on profitability, but Barclays Capital analysts estimated that Connections Academy’s margin of earnings before interest and tax was 15 per cent or above, implying that the deal could enhance Pearson’s earnings by 1.5-2 per cent in 2012. Shares in Pearson were up 27p at £11.05 in afternoon trading.