Pearson, publisher of the Financial Times, is in advanced talks about acquiring a chain of private schools in Shanghai, the first time it would own an education institution anywhere in the world.
Although the size of the deal for LEC is low – its 15 schools made revenues of less than $10m – it offers a way of entering the heavily regulated Chinese education market.
LEC schools provides after-school education for children aged five to 12 whose parents pay for them to learn English. Pearson has made forays into China through FTChinese.com and Penguin. At its annual meeting last month, it announced board appointments aimed at growing its education business outside the US.
The LEC deal, which has been in the works for at least a year, would run counter to competitors in the education market who have been abandoning or selling up their international operations to private equity and focusing on the US.
Pearson insiders say the shift in education is moving towards technology platforms and software in education rather than printed textbooks, and the LEC schools offer among other benefits a way of showcasing products such as interactive boards.
Fascinating.