LONDON-- Pearson PLC is buying Grupo Multi, an English-language
training company in Brazil with more than 800,000 students, for
GBP440 million ($719.6 million).
The London-based publishing and education group said Tuesday it
would buy Grupo Multi from its 78% majority shareholder, the family
of founder Carlos Martins, and Itau Unibanco Holding S.A. unit
Kinea, which bought a stake in 2010. Pearson will pay in cash and
take on GBP65 million of debt.
"The acquisition supports Pearson's strategy of focusing
investment in fast-growing economies, digital and services
business," the company said.
"A shortage of English speakers in key sectors including
tourism, transportation, and hospitality is considered to be one of
Brazil's challenges as it prepares to host high-profile global
events including the World Cup and the Olympics," the company
added.
The acquisition comes as Pearson, the world's largest publisher
of educational materials, looks to shift its education businesses
to emerging markets and prioritize digital content, software and
services over print.
As well as Brazil, the company is rolling out language schools
and digital learning programs in China and India to take advantage
of high enrollment numbers and demand for education among
burgeoning middle classes.
Pearson said Multi is the largest provider of private language
schools in Brazil, with more than 2,600 franchised schools
delivering English language courses under a range of brands
including Wizard, Yazigi, Microlins and Skill. Multi reported
operating profit of GBP42 million in 2012, and had gross assets of
GBP200 million on Dec. 31.
Brazil is one of the world's largest English language learning
markets, according to Pearson, with the English language training
market estimated to be worth GBP2 billion and a total of 2.8
million students enrolled across children, teenage and adult age
groups. The company expects this market to grow as Brazil's middle
class expands.
Pearson said the deal is expected to enhance adjusted earnings
per share from 2015, and to generate a return on invested capital
slightly above the company's weighted average.
News Corp, which owns Dow Jones & Co., publisher of The Wall
Street Journal, competes with Pearson's book publishing,
business-news and education divisions.
Simon Zekaria contributed to this article.
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