REG - Pearson PLC - Pearson Announces Sale - Local Courseware Business

PearsonAnnouncement

12/08/2022 11:30

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RNS Number : 8831V  Pearson PLC  12 August 2022

Pearson Announces Sale of Local Courseware Business in South Africa

 

LONDON, 12 August 2022: In March 2021, Pearson, the world's leading learning
company, announced a strategic review of its International Courseware local
publishing businesses. This transaction forms part of that process and follows
the disposal of our K12 business in Brazil and our K12 courseware French
Canadian business, as well as agreements to sell our K12 businesses in Italy,
Germany, and Hong Kong.

 

Today, Pearson announces that it has agreed to sell its 75% share of the K12,
TVET and local Higher Education Courseware business in South Africa to Novus
Holdings Limited ("Novus Holdings"), with its headquarters in Cape Town, South
Africa, and listed on the Johannesburg Stock Exchange (JSE). Novus Holdings is
a specialised printing and packaging manufacturing group which services
customers across sub-Saharan Africa through an extensive and diverse range of
products and solutions. The headline consideration of this transaction is
£53m, which will be received on completion, subject to typical working
capital and net debt changes and adjusted to reflect our 75% share. The
transaction remains subject to customary closing conditions, including
regulatory and Novus Holdings shareholder approval.

 

The South African K12, TVET and local Higher Education Courseware business had
gross assets of £15m and net assets of £5m as at 30 June 2022. The
businesses generated £44.4m of revenue and £10.3m of adjusted operating
profit in 2021.

 

The sale of this business concludes the review of our international courseware
local publishing businesses, where we have achieved a blended multiple of
14.1x EV/EBITDA 2021.

 

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 £170m in shares repurchased since launch.

 

In 2021, the businesses which we put under 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 £15m-£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, with an offset in the
transaction working capital adjustment, recorded within cash from investing
activities. As we announced recently, we have decided to retain our Australian
and English-speaking Canadian K12 Courseware businesses to deliver increased
shareholder value as part of the Group.

 

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

 

 

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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

 

Forward looking statements:

Except for the historical information contained herein, the matters discussed
in this statement include forward-looking statements. In particular, all
statements that express forecasts, expectations, and projections with respect
to future matters, including trends in results of operations, margins, growth
rates, overall market trends, the impact of interest or exchange rates, the
availability of financing, anticipated cost savings and synergies and the
execution of Pearson's strategy, are forward looking statements. By their
nature, forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that will occur in future.
They are based on numerous assumptions regarding Pearson's present and future
business strategies and the environment in which it will operate in the
future. There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements, including a number of factors outside Pearson's
control. These include international, national, and local conditions, as well
as competition. They also include other risks detailed from time to time in
Pearson's publicly filed documents and you are advised to read, in particular,
the risk factors set out in Pearson's latest annual report and accounts, which
can be found on its website (www.pearsonplc.com/investors).

 

Any forward-looking statements speak only as of the date they are made, and
Pearson gives no undertaking to update forward-looking statements to reflect
any changes in its expectations with regard thereto or any changes to events,
conditions or circumstances on which any such statement is based. Readers are
cautioned not to place undue reliance on such forward-looking statements.

 

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