UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2007
PEARSON plc
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant's name into English)
80 Strand
London, England WC2R 0RL
44-20-7010-2000
(Address of principal executive office)
Indicate by check mark whether the Registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
Indicate by check mark whether the Registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
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This Report includes the following documents:
1. A press release from Pearson plc announcing Acquisition
4 May 2007
PEARSON ACQUIRES HARCOURT ASSESSMENT AND HARCOURT EDUCATION INTERNATIONAL
FROM REED ELSEVIER
Pearson, the international education and information company, today announces
that it has agreed to acquire Harcourt Assessment and Harcourt Education
International from Reed Elsevier for $950m in cash.
The acquisition extends Pearson's position as the world's leading education
company by adding international reach, complementary products and new
capabilities. The transaction does not include Harcourt's US School basal and
supplementary publishing businesses.
In testing, Harcourt Assessment has an extensive catalogue of high quality
research-based education and clinical assessment products for children and
adults. Harcourt's heritage and expertise in test development and publishing
extends Pearson's leading position in providing US states and the Federal
Government with contracted testing services including programme management,
marking, logistics and operations. Pearson and Harcourt already work
side-by-side on several state contracts, where Harcourt provides test
development and Pearson provides test marking and administration.
Harcourt publishes market-leading tests in many segments including the Stanford
Achievement Test series and the Watson-Glaser Critical Thinking Appraisal for
school students; the Miller Analogies Test for graduate school applicants; the
Naglieri and Versant tests for English language learners; and the Wechsler
Intelligence Scales and Raven's Matrices for clinical assessment (which
complement Pearson's existing clinical assessments). These tests are sold in the
US and around the world.
In international education, Harcourt publishes textbooks and online learning
materials for teachers and students in primary and secondary schools and the
vocational market. With imprints including Heinemann, Rigby, Ginn, Payne Gallway
and Raintree, it is a leading school publisher in the UK, Australia and New
Zealand; it is one of the fastest growing school publishers in South Africa; and
it is also active in many other regions including Asia, the Middle East, Africa
and the Caribbean.
In recent years, Pearson has been building its position in these markets,
supported by its investments in content, assessment and digital learning
services. The transaction will accelerate Pearson's goal of combining
educational content and innovative technology to offer students and teachers new
products and services that can personalise learning to the needs of each
student.
In 2006, Harcourt Assessment and Harcourt Education International contributed
$524m of sales and $31m of operating profit to Reed Elsevier (before
restructuring charges and one-off costs relating to the US testing business).
The businesses generated $54m of operating profit in 2005 and $84m in 2004. At
the end of 2006, they reported gross assets of $741m.
The transaction will close in several stages, following regulatory review by the
relevant authorities where required. Although the timing of regulatory approval
will influence the phasing of integration spend and benefits, Pearson expects
the acquisition to be broadly neutral to adjusted earnings per share after
restructuring costs in 2007 and 2008. Pearson also expects the acquisition to
enhance Pearson's adjusted EPS and generate a return above Pearson's cost of
capital from 2009. The purchase price includes a tax benefit worth approximately
$125m, which we expect to reduce Pearson's tax rate on adjusted earnings per
share by around one percentage point from 2008.
Marjorie Scardino, chief executive, said:
"We have long admired these businesses. They bring new intellectual property,
capabilities and skills to Pearson, and will enable us to accelerate our
strategy of leading the personalisation of learning, both in the US and around
the world. We know that their people share our commitment to education, and we
look forward to welcoming them as colleagues."
Ends
For more information:
Luke Swanson/ Simon Mays-Smith +44 (0)20 7010 2310
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PEARSON plc
Date: 04 May 2007
By: /s/ STEPHEN JONES
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Stephen Jones
Deputy Secretary