11th Dec 2006 07:02
Pearson PLC11 December 2006 11 December 2006 Pearson to sell Government Solutions to Veritas Capital Pearson, the international media and education company, today announces that ithas agreed to sell Pearson Government Solutions, its government servicesbusiness, to Veritas Capital. The purchase price consists of $560m in cash, $40min preferred stock and 10% of the equity of the business. The transaction is subject to regulatory approval and other closing conditionsand is expected to be completed in the first quarter of 2007. In 2005, Government Solutions contributed $46m of operating profit to Pearson.At the end of June 2006, it had gross assets including goodwill of $573m. Pearson expects to realise net cash proceeds of approximately $560m on the sale.It intends to use the proceeds to invest in its businesses, both organically andthrough bolt-on acquisitions, and to reduce its overall indebtedness. "Government Solutions has achieved exceptional growth as part of Pearson. It hasa strong management team and an ambitious strategy for expansion, and Veritaswill invest in and support those plans," said Marjorie Scardino, chief executiveof Pearson. "Pearson's focus is on building our leadership positions in education andinformation through strong organic growth and selected new business investments.This transaction is consistent with that strategy." With more than 5,500 employees, Government Solutions serves national and localgovernments, education institutions and corporations in the US and around theworld. The company designs, builds and operates solutions to provideinformation, benefits and services to its clients' customers. Clients includethe U.S. Departments of Education, Health and Human Services, Defense, Justiceand Labor and the London Borough of Southwark. In the past 18 months, it hasrenewed and extended its two largest contracts: the Federal Student Aid contractfor the US Department of Education and the Centers for Medicare & MedicaidServices contract for the US Department of Health. Government Solutions became part of Pearson in 2000 when Pearson acquirededucational testing and technology company National Computer Systems Inc (NCS).Since that time Government Solutions has grown rapidly, more than tripling salesover the past six years. Veritas Capital is a leading New York-based private equity firm with particularexpertise in the government services, media, defence, aerospace and consumerproducts industries. It partners with experienced management teams to developleading companies in industries with attractive dynamics. Ends For more information: Luke Swanson/ Simon Mays-Smith/ Deborah Lincoln + 44 (0) 207 010 2310 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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