Dive Brief:
- Pearson announced Tuesday it will sell its online education services, including its online program management company, to the private equity firm Regent.
- Regent will pay the British publisher 27.5% of the services’ adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, each year for six years. Regents will also pay Pearson another 27.5% of proceeds if the equity firm liquidates the online services business.
- Pearson Online Learning Services works with over 450 programs at over 30 institutions globally, according to the company’s website.
Dive Insight:
Pearson’s OPM is losing one of its biggest clients, Arizona State University, come June. It also lost 1,000 students in the first half of 2022 compared to last year. These struggles reflect similar problems with OPMs across the higher ed sector, as they face declines in revenue, enrollment and clients, along with increased scrutiny from lawmakers.
Excluding its contract with Arizona State, Pearson Online Learning Service generated about $189 million in revenue and had $32 million in adjusted operating losses in 2022. It had roughly $138 million in gross assets as of the end of last year.
The sale isn’t expected to significantly affect Pearson’s 2023 adjusted operating profit, according to a news release from the firm.Â
“The deal demonstrates further progress in reshaping Pearson’s portfolio towards future growth opportunities centered around lifelong learning,” the company said.
