Pearson splashes $500m to buy Brazil's top English language school
Tuesday 03 December 2013
Education giant Pearson has acquired Grupo Multi, an English-language school provider
in Brazil as the FTSE 100 group presses ahead with its expansion plans in emerging markets.
Chief executive John Fallon’s acquisition comes days after he off-loaded financial information business Merger Market, previously part of Pearson’s Financial Times Group division, in a £382 million deal.
“Brazilians’ appetite for learning English as a global language of business and trade shows every sign of continuing to grow rapidly,” said Fallon, who is looking ahead to next year’s football World Cup and the 2016 Olympics in Brazil.
However, the City gave only a lukewarm reception to the acquisition of Grupo Multi, which teaches 800,000 students.
Barclays described it as “strategically sensible” as Pearson already has a big international English-language teaching brand, Wall Street English, in China.
But analysts remain worried about Pearson’s direction of travel.
“It does not resolve the key issue around their core area, North American education,” said Liberum, referring to Pearson’s lacklustre third-quarter results that showed “lower college enrolments” and “budget uncertainty”.
Fallon has warned profits will only be flat this year as he carries out a major restructuring.
Pearson has been pushing into digital and mobile services around education and cutting involvement in print and financial information, spinning off book publisher Penguin and selling several FT assets.
However, Fallon has said the flagship newspaper is “not for sale” as it fits with his focus on serving a growing middle-class in emerging markets.
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