Pearson has completed the sale of language training subsidiary Global Education in a deal worth $80m (£62m).
The sale to tutorial company Puxin Education marks a further “strategic shift away from large-scale direct delivery services to focus on more scalable online, virtual, and blended services” according to a Pearson spokesperson.
The deal, together with the sale of associated property assets, is expected to generate around $80m in gross cash proceeds to education giant Pearson.
Pearson originally bought the English language-testing company in a deal worth $294m (£228m) in November 2011. The deal cost Pearson $155m (£120m) in cash with the balance of the deal offset by GETG holding a cash balance of $139m (£107m). The sale is the most recent company Pearson has offloaded - it sold the Financial Times for £884m in July 2015 to the Japanese Nikkei Inc, its 50% stake in the Economist for £469m in August that same year and just last month revealed it had agreed to sell 22% of its stake in Penguin Random House to co-shareholder Bertelsmann. The deal, which is expected to close at the end of next month, tightens Bertelsmann's grip on PRH to a 75% stake with Pearson owning the remaining quarter.
The move follows news earlier this month that Pearson is set to axe 3,000 jobs. The restructure was announced as part of the company’s bid to save £300m a year in costs.
Global Education (GEDU) is a leading provider of English language training and test preparation for Chinese students preparing to study abroad. It was founded 20 years ago and acquired by Pearson in 2011.
Last year it boasted 64,000 learners with a revenue of £78m and an adjusted operating loss of £4m.
Puxin Education is a private education company which offers a tutorial program for preparation for overseas tests and college admission across more than 30 cities in China.
A spokesperson for Pearson said the move was a "strategic shift" following the company's full year results revealed in February which showed a £2.6bn loss.
The company spokesperson said: “The sale marks progress in Pearson's strategic shift away from large-scale direct delivery services to focus on more scalable online, virtual, and blended services. It follows Pearson's announcement at its full year 2016 results in February that it was exploring a possible exit of the business.”
The company, which delivered its fifth profit warning in four years in January, also reported a sharp rise in debt to £1,092m (2015: £654m) in its full year results.