Pearson buys Reed's education, assessment businesses for 950 mln usd UPDATE

Pearson buys Reed's education, assessment businesses for 950 mln usd UPDATE

	Published : Fri, 04 May 2007 18:03 By : Agencies Print this Story

(Adds detail, analyst comment, share prices)

LONDON (Thomson Financial) - Pearson PLC has moved to expand its education publishing business with the acquisition of the assessment and education operations of rival Reed Elsevier PLC for 950 mln usd (477 mln stg) in cash

Reed put the Harcourt Assessment and Harcourt Education International businesses up for sale in February in order to focus on its science, medical, legal and business to business publishing markets.

'We have long admired these businesses,' Pearson chief executive Marjorie Scardino said in a statement. 'They bring new intellectual property, capabilities and skills to Pearson.'

The US-based Harcourt Assessment, provides testing and performance measurement services for teachers, psychologists and human resource professionals.

Education International, which is headquartered in Oxford, publishes educational materials in international markets.

In 2006 the two businesses had sales of 524 mln usd .

Pearson, which makes about two-thirds of its revenues from its education business, was seen as a likely bidder for the Reed businesses in the consolidating market. Canadian media group Thomson Corp, which owns Thomson Financial News, has also put its education publishing business up for sale, which is expected to fetch 5 bln usd.

Numis Securities' Richard Hitchcock said it was a 'fair price' for the businesses and a 'sensible deal' for Pearson.

'The (Harcourt) business is currently low margin, about 6 pct, reflecting recent trading difficulties, and we think they (Pearson) can get this back to historic levels of closer to 15 pct.'

Pearson said it expected the acquisition to enhance earnings from 2009.

Reed Elsevier shares were up 18 pence to close at 650 pence, valuing the company at 8.05 bln stg.

Pearson shares were up 15-1/2 pence to close at 891, valuing the company at 7.15 bln stg.

tf.TFN-Europe_newsdesk@thomson.com

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