Pearson sells OPM arm to private equity firm

Published 21/03/2023

Pearson has made the decision to sell its online management services platform for universities to global private equity firm Regent.

Pearson Online Learning Services will change hands amid the conclusion of a “strategic review” of the business, which began in August 2022, for a deferred sum.

No upfront fee was mentioned in the announcement.

It comes after Pearson announced an 11% rise in profit in its year-end financial report, reaching £456 million in 2022.

The sale will take place over six years, with Regent paying Pearson 27.5% of POLS’ adjusted earnings each year, followed by a further payment of 27.5% of any proceeds related to POLS after the sale is complete.

In response to the latest developments, it said the acquisition of POLS by Regent was “likely to be immaterial” in its 2023 operating profits, but that this will be dependent on when the transaction is finalised.

“This is another example of the growth in acquisitions of online education companies,” observed education consultant Neil Mosley, posting on LinkedIn.

“It will be interesting to see potential impacts – if there are any…”

“[The sale] demonstrates further progress in reshaping Pearson’s portfolio towards future growth opportunities centred around lifelong learning,” Pearson’s announcement commented.

Education consultant Phil Hill also posted about the acquisition on LinkedIn, saying the move appears to be a “distressed sale” that is “likely to accelerate cost-cutting (i.e. layoffs)”.

“This is not a sale from a position of strength”

“Speculation here, but this is not a sale from a position of strength,” Hill commented.

Despite generating £155m of revenue in 2022, POLS also saw “adjusted” operating losses of £26m. Its gross and net assets as of the end of 2022 were £113m and £78m respectively.

Pearson stated that the business saw £52m in statutory losses before tax. This included restructuring, intangible assets and finance charges, and it also reported some £5m in now-eliminated stranded costs.

Based in Los Angeles, Regent LP, a global private equity firm, has a portfolio that includes brands across different industries, such as Club Monaco, Sassoon and Wonderbra.

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