Pearson plc (LON:PSON) , the education giant, revealed on Monday it had sold off its Wall Street English language teaching unit.
A group of funds linked to Baring Private Equity Asia and Citic Capital have stumped up US$300mln for the division, which Pearson bought for US$240mln seven years ago.
The deal will only help the former Financial Times owner to cut its debt by US$100mln or so though due to various costs and the fact that US$150mln of cash will stay with the language-training business.
Pearson – which has struggled recently and issued a string of profit warnings – said the sale was part of its strategy to focus on a “smaller number of bigger opportunities in global education”.
It announced back in February that it was looking for a strategic partner for Wall Street English as part of a strategic review launched after it reported a record £2.6bn loss.
City broker Liberum reckons the fact that net debt will only be reduced by a “paltry” US$100mln will likely disappoint investors who “would have been looking for bigger cash proceeds”.
“It also explains why the business was able to be sold at such a high headline figure,” added analyst Ian Whittaker.