Pearson Agrees To Buy Brazilian English Learning Firm Grupo Multi - Update

(RTTNews) - Learning company Pearson Plc (PSO, PSON.L) Tuesday said that it has agreed to acquire Grupo Multi, a Brazilian adult English Language Training company, for about 440 million pounds or 1.7 billion Brazilian Reais in cash and the assumption of 65 million pounds or 0.25 billion reais of debt..

Pearson will acquire Grupo Multi from the Martins family, the company's 78 percent majority shareholders, and the investment firm Kinea.

The company said the transaction is subject to a regulatory review that would be completed in the first half of 2014. In 2015, Pearson expects a full year contribution from Grupo Multi to enhance its adjusted earnings per share.

Grupo Multi, the largest provider of private language schools in Brazil, serves over 800 thousand students across more than 2,600 franchised schools. The company primarily delivers English language courses through a range of school brands including Wizard, Yazigi, Microlins and Skill. In 2012, Grupo Multi generated operating profits of 42 million pounds, and as of December 31, 2012 had gross assets of 200 million pounds.

According to Pearson, the acquisition supports its strategy of focusing investment in fast-growing economies, digital and services business, and education programs. During 2014, Grupo Multi will be integrated into Pearson's Professional Line of Business and Growth geographic segment.

Pearson said the acquisition builds on its schools 'sistemas' business in Brazil. The company already has over 600 thousand students learning English at more than 250 Pearson operated and more than 350 Pearson franchised centres around the world, while it has about 500 thousand students in K12 sistemas schools in Brazil.

Brazil, one of the world's largest English Language Learning markets, is expected to grow rapidly supported by an expanding middle class population, and a shortage of English speakers in key sectors, as the country prepares to host high-profile global events including the World Cup and the Olympics.

As part of the acquisition due diligence, Pearson completed its efficacy review of Multi, which found out that its schools have helped millions of students to acquire strong communicative English skills.

Pearson also expects the acquisition to support a more rapid deployment of its Wall Street English language schools in Brazil, to benefit from using Multi's products and services in its schools business and to create additional economies of scale in the region. Over time, Pearson also expects to apply some of Grupo Multi's programs focused on the emerging middle class in other markets across the globe.

Pearson Chief Executive John Fallon said, "We intend to sustain and grow the business, helping many more young Brazilians to acquire the English language skills that will help them succeed in their careers." In the transaction, Morgan Stanley acted as financial adviser to Pearson.

In London, Pearson shares closed Monday's trading at 1,343.21 pence, up 0.21 pence or 0.02 percent.