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- Pearson announced Tuesday that it will sell its online education services, including its online program management company, to private equity firm Regent.
- Regent will pay the UK publisher 27.5% of adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, each year for six years. The rulers will also pay Pearson a further 27.5% of the proceeds if the public company spins off the online services business.
- Pearson Online Learning Services works with more than 450 programs at more than 30 institutions worldwide, according to the company’s website.
Pearson’s OPM is losing one of its biggest clients, Arizona State University, in June. It also lost 1,000 students in the first half of 2022 compared to last year. These struggles mirror similar problems with OPM across the higher ed sector, as they face downturns in revenue, registrations and clients along with increased scrutiny from lawmakers.
Excluding the contract with the state of Arizona, Pearson Online Learning Service generated revenues of approximately $189 million in 2022 and had an adjusted operating loss of $32 million in 2022. At the end of last year, it had roughly $138 million in gross assets.
The sale is not expected to materially impact Pearson’s adjusted operating profit in 2023, according to a press release from company.
“The agreement demonstrates further progress in reshaping Pearson’s portfolio towards future growth opportunities focused on lifelong learning,” the company said.