After a year on the market, Pearson’s K-12 courseware and curriculum business in the United States has been sold for $250 million in cash and debt.
The British publishing company said this week it is selling the business to California-based Nexus Capital Management.
The sale will not include the Pearson Vue division that conducts educational tests in offices in Bloomington and Minneapolis. It also does not include the company’s higher-education textbook business.
The sale of the K-12 business is unusually structured.
The deal involves an initial $25 million cash payment, followed by an “unconditional vendor note” of $225 million. The note is expected to be paid in three to seven years, Pearson officials said.
Following the repayment of the vendor note, Pearson will be entitled to 20 percent of all future cash flows and 20 percent of net proceeds should the business be sold again.
“This additional consideration has been structured to provide Pearson with the potential to capture future upside in the U.S. K-12 courseware adoptions market over the coming years,” officials said.
Pearson’s North American educational business is based in Hoboken, N.J. Pearson provides textbooks, educational software and other instructional resources that help K-12 teachers and students across the United States and beyond.
The business has 1,330 employees and $477 million in annual revenue and $26 million in profits. It is not yet clear if the sale will result in any job losses or changes in locations or services in other parts of the country.
The effect in Minnesota is expected to be minimal or none, employees said.
“School publishing in America has been an important part of Pearson for many years, and what it does, matters to teachers and students across the country,” said John Fallon, Pearson’s CEO, in a statement.
“We’re pleased to have found new owners who are committed to its future, and we wish it every success,” he said. “The sale frees us up to focus on the digital first strategy that will drive our future growth.”
Fallon added that it will continue its assessment, virtual school, advanced placement and career and technical education programs.
“We will still serve schools across America, and we will now be better placed to focus on the areas in which we can best help their students to be successful in their studies and future careers,” he said.