Published On: Wed, Jun 8th, 2011

Pearson Education on a lookout for tie-ups, acquisition

EduShine Academic Search

Pearson Education India, the operating company of Pearson has said that it is eyeing to acquire 10 per cent share in Indian education market in coming two years. The company has recently acquired a majority stake in online site TutorVista and tied up with Educomp Solutions Ltd. “We will grow inorganically, organically in the Indian market, will continue to forge alliances and buy out companies wherever there are synergies,” said Anish Srikrishna, chief marketing officer of Pearson Publishing India.

Pearson, which owns the Financial Times newspaper and publisher Penguin, is growing at over 20% compounded annual growth rate in higher education and school publishing.“Education as an investment destination is growing from the nascent stage to the growth stage. Institutions have to gain size and scale through three options—getting funded, getting acquired or coming together with other companies,” said Narayanan Ramaswamy, executive director, education, at consulting firm KPMG Advisory Services Pvt. Ltd.

“Many a time, the question is whether you would want to build new capabilities or acquire through inorganic means.”Two years ago, Pearson invested $30 million (around Rs. 135 crore today) to co-promote vocational training provider IndiaCan with Educomp and took a 17.2% stake in TutorVista. Earlier this year, it acquired an additional 59% stake in TutorVista to take its holding to around 76% for $127 million.Growth will come from higher education and the teachers training division of the company, Srikrishna said.“With the government planning to spend Rs. 1 lakh crore to provide higher education, companies like us can partner with them in various programmes,” he said.

“We would want to implement the successful teachers training model in Bhutan with the state governments in India.”Pearson is in talks with various state governments and expects to roll out the programme in the near future.

“Any public private partnership in India requires lot of due diligence, which is time-consuming and hence no timeline can be given on when we can roll this out,” Srikrishna said.

According to Ernst and Young 2010 report, the Indian higher education system has more than 26,000 institutes across varied fields of study. The report also says that spending in the higher education segment is expected to increase to Rs. 1.55 trillion by 2020. “In 10 years, by 2020, keeping in mind the target Gross Enrolment Ratio (GER, number of students admitted to schools and colleges) of 20%, and taking into account the prescribed infrastructure for educational institutes, we would need to invest Rs. 360,640 crore,” the report said.

The company is presently looking for various tie-ups and acquisitions in the field of education.

[Source: Livemint]