REG - Pearson PLC - Disposal

PearsonAnnouncement

07/06/2022 07:01

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RNS Number : 9604N  Pearson PLC  07 June 2022

Pearson Announces Sale of Local K12 Courseware Businesses in Italy &
Germany

 

LONDON, 07 JUNE 2022: In March 2021, Pearson, the world's leading learning
company, announced a strategic review of its International Courseware local
publishing businesses. As part of this review, Pearson already completed the
disposal of its Brazilian sistemas business in October 2021 for R$789m
(£108m).

 

Today, Pearson announces that it has agreed to sell its local K12 Courseware
businesses in Italy and Germany to Sanoma Corporation, a leading European K12
learning services company operating in 11 countries and listed in Nasdaq
Helsinki (SAA1V). The headline consideration of this transaction is £163m,
which will be paid in cash on completion, subject to typical working capital
adjustments. Under the terms of the transaction, Pearson will also enter into
an agreement with Sanoma for it to distribute Pearson's English Language
Teaching products in Italy.

 

As previously stated, the proceeds of this transaction were anticipated in the
decision to commence Pearson's £350m share buyback programme, which is
progressing well, with over £100m in shares repurchased since launch.

 

The Italian and German local K12 Courseware businesses had gross assets of
c.£135m and net assets of c.£105m as at 31 December 2021( 1 ).The businesses
generated c.£90m of revenue and c.£9m of adjusted operating profit in 2021.
The enterprise value represents an EV / 2021 EBITDA multiple of 15.5x.

 

In 2021, the businesses that are the subject of strategic review ("strategic
review businesses") contributed revenue of £252m, and £22m in adjusted
operating profit. The impact of disposals of strategic review businesses on
Pearson's 2022 adjusted operating profit will depend upon the timing of
transaction completions, but is expected to be c.£15-20m, reflecting the
second half weighting of their financial contributions. Operating cash flow
for these businesses is weighted to Q4 and the timing of completion is
therefore also likely to impact operating cash conversion in 2022. This cash
impact will be offset by the transaction working capital adjustment, recorded
within cash from investing activities.

 

Pearson continues to make good progress in the remaining areas of the
strategic review and will provide a further update on this in due course.

 

BNP Paribas has acted as exclusive financial adviser to Pearson plc regarding
the review of its International Courseware local publishing businesses.

 

This announcement contains inside information.

 

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Contacts

 Investor Relations    Jo Russell              +44 (0) 7785 451 266

                       James Caddy             +44 (0) 7825 948 218
 Media                 Tom Steiner             +44 (0) 7787 415 891

                       Gemma Terry             +44 (0) 7841 363 216
 Teneo                 Charles Armitstead      +44 (0) 7703 330 269

 

 1  Gross asset value and net asset value figures are unaudited as at 31
December 2021

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