LONDON (Reuters) - Education group Pearson (PSON.L) has agreed the sale of its Wall Street English (WSE) business to Baring Private Equity Asia and CITIC Capital for around $300 million, although its proceeds from the deal will be just a third of that.
Pearson, which has sold several assets to focus on its core education business and cut debt, said that of the $300 million, $50 million would cover tax and net transaction costs while $150 million would be retained in the disposed business.
Shares in the group slipped 1.7 percent in early Monday trading on disappointment a business that teaches English to adults in multiple countries including China had not brought in more.
Pearson, which has sold off assets including the Financial Times newspaper and the Economist magazine, had net debt of 1.3 billion pounds ($1.7 billion) at the end of September.
The sale will, however, reduce the number of people working for Pearson, as WSE employs around 3,600 people. The group said in August it would cut 3,000 jobs, which at the time accounted for almost 10 percent of the group total.
Pearson, which has been hit by a slowdown in the United States and from the shift to digital from paper textbooks, has cut thousands of jobs and restructured following a string of profit warnings in recent years.
“The sale of Wall Street English is part of our continued effort to focus on a smaller number of bigger opportunities in global education and to become simpler and more efficient,” Chief Executive John Fallon said.
The transaction is expected to close in the first half of 2018. Shares in the group were down 1.5 percent at 0847 GMT, giving Pearson a market value of 5.6 billion pounds.
($1 = 0.7494 pounds)
Reporting by Kate Holton; Editing by James Davey and Mark Potter