Pearson Online Learning Services will change hands following the conclusion of a “strategic review” of the business, which began in August 2022, for a deferred sum.
No upfront fee was mentioned in the notification.
It comes after Pearson reported an 11% rise in profits to £456m in 2022 in its year-end financial report.
The sale will take place over a period of six years, with Regent paying Pearson 27.5% of adjusted POLS revenue each year, followed by an additional payment of 27.5% of all POLS-related revenue upon completion of the sale.
In response to the latest development, it said Regent’s acquisition of POLS “is unlikely to be material” to its operating profits in 2023, but that this would depend on when the transaction is completed.
“This is yet another example of the surge in acquisitions of online education companies,” noted education consultant Neil Mosley on LinkedIn.
“It will be interesting to see the potential impact – if any…”
“[The sale] demonstrates further progress in reshaping Pearson’s portfolio towards future growth opportunities focused on lifelong learning,” commented Pearson’s announcement.
Education consultant Phil Hill also posted on LinkedIn about the acquisition, saying the move appears to be a “distress sale” that “is likely to accelerate cost-cutting (i.e. layoffs).
“This is not selling from a position of strength”
“Speculation, but this is not selling from a position of strength,” Hill noted.
Despite generating revenues of £155m in 2022, POLS also posted “adjusted” operating losses of £26m. Its gross and net assets at the end of 2022 were £113 million and £78 million, respectively.
Pearson said the company recorded statutory pre-tax losses of £52m. This included restructuring, intangible assets and finance charges and also reported around £5m in now-eliminated stranded costs.
Regent LP, a global private equity firm headquartered in Los Angeles, has a portfolio that includes brands across various industries such as Club Monaco, Sassoon and Wonderbra.