Pearson PLC to acquire Brazil's English language training company Grupo Multi

Pearson PLC is acquiring Grupo Multi, an English-language training company in Brazil with over 800,000 students, for £440 million.

According to the London-based publishing and education group, it would buy Grupo Multi from the family of founder Carlos Martins, which holds a 78 per cent majority stake, and Itau Unibanco Holding SA unit Kinea, which bought a stake in 2010. Pearson would pay in cash and take on £65 million of debt.

The company said the acquisition supported Pearson's strategy of focusing investment in fast-growing economies, digital and services business.

It added, a shortage of English speakers in key sectors including tourism, transportation, and hospitality was considered to be one of Brazil's challenges as it prepared to host high-profile global events including the World Cup and the Olympics.

The move comes with the company, the world's largest publisher of educational materials, looking to shift its education businesses to emerging markets and prioritise digital content, software and services over print.

In addition to Brazil, the company would roll out language schools and digital learning programmes in China and India to leverage high enrollment due to increasing demand for education among the growing middle classes.

According to Pearson, Multi was the largest provider of private language schools in Brazil, with over 2,600 franchised schools delivering English language courses under a range of brands including Wizard, Yazigi, Microlins and Skill.

Multi posted operating profit of £42 million in 2012, and held gross assets of £200 million on 31 December.

The deal marks Pearson's biggest acquisition after it bought Harcourt Education from Reed Elsevier Plc in a £580-million deal in 2007, according to data compiled by Bloomberg.

Pearson said Brazil is one of the largest English-language education markets worth about £2 billion.

The company would be spending £150 million on reorganising this year to accelerate growth in emerging markets and digital services, with a  slowdown in some large markets hurting profits.

The company on 30 October forecast full-year operating profit excluding some items to fall from 2012, on slowing North American sales for college textbooks as lower freshman enrolments and bookstore purchasing weakened demand.

The transaction would likely be completed in the first half of 2014. Morgan Stanley is financial adviser to Pearson.