Pearson swoop on part of Reed Elsevier education
Dame Marjorie Scardino and her team at Pearson have pulled off a coup with their £425m purchase of two parts of Reed Elsevier’s (RE) education business.
While the
HA is a gem for Pearson as it is one of their key competitors in the
The numbers are - combined turnover of about £370m, sales of £262m and profit of just £15.5m after £10.5m of exceptional items (restructuring costs). While these don’t look great, both HA and HEI are an excellent fit for Pearson, although we still think there may be some regulatory concerns about Pearson’s share of the
As we noted last month, Dame Marjorie has said she was interested in Wolters Kluwer, but not at £215m, the turnover multiple of 2.44 paid by Bridgewater Capital. Paying a turnover multiple of just 1.15 for HA and HEI seems a far better deal, although on an earnings basis the deal is less attractive, but this probably means Pearson believe there are plenty of costs to be trimmed. Our first step would be a hiring freeze – the message obviously hasn’t hit yet as the Monday after the announcement there were nine jobs at Harcourt in Media Guardian.