Pearson stepped up its push into the training and assessment market yesterday with a deal to acquire the AIM-listed Education Development International for £113 million.
The education publisher, which also owns Penguin Books, said that it had made a 200p-a-share cash offer for EDI, which provides vocational training for companies and organisations and assessment systems for schools.
The offer values EDI at a 61 per cent premium over its closing share price on March 4, the last day before the offer period, Pearson said.
The publisher said that it had secured the support of almost one third of EDI’s shareholders, including its directors, who own nearly 10 per cent.
The deal would lead to a windfall of more than £6 million for Nigel Snook, the former civil servant who runs EDI and holds a 5.7 per cent stake in the company. Mr Snook said: “The offer price reflects the value created for shareholders over the past ten years through the hard work and commitment of the staff and management team.”
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Shares in EDI rose by 59 per cent to close at 197p yesterday. Shares in Pearson were up nearly 1 per cent to 1,100p.
Dame Marjorie Scardino, Pearson’s chief executive, has been on an acquisition spree after gaining a war chest through the £2 billion sale of Interactive Data Corporation.
Pearson paid £535 million for several education businesses, particularly in emerging markets, including the Wall Street Institute, a chain of English- language schools.
John Fallon, the chief executive of Pearson’s international education business, said: “In EDI we have found a dynamic partner who shares our commitment to education and training. We will be even better placed to work with employers and training partners to develop high-quality apprenticeships and related qualifications.”
This month Pearson reported its strongest financial performance since Dame Marjorie took the helm 14 years ago. Soaring demand from students in developing countries and a sharp rise in sales from digital books and newspapers helped to push pre-tax profits to a record £670 million.
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After stripping out currency benefits and acquisitions, underlying sales rose by 5 per cent to £5.7 billion in the year to December 31, Pearson said. Sales of textbooks and other learning materials to students in markets such as China and Brazil grew by 29 per cent last year and now accounted for a tenth of its revenues.
Pearson said that it had blocked a dividend payment of nearly £7 million to the Libyan Investment Authority after receiving legal advice that the sovereign wealth fund was subject to freezing orders against Colonel Gaddafi and his family.
The LIA is believed to be the fifth-largest shareholder in the education and publishing group, with a 3.27 per cent stake worth £280 million.