Pearson, a global publishing maior, on Tuesday announced that it has acquired majority control of 76 per cent in Bangalore-based education company TutorVista, for a consideration of Rs 577 crore. TutorVista was founded in 2005 by Krishnan Ganesh, a noted serial entrepreneur. The company has more than 800 employees and a roster of 2000 tutors. Pearson during 2009 had acquired a minority stake for around Rs 54 crore and with this fresh infusion its total equity investment in Tutorvista goes to Rs 631 crore.
TutorVista will be integrated into Pearson's education business in India and will enhance our presence in the school market in India and in tutoring across the globe in schools and higher education. Pearson with this move expands its education footprint in India and also take a big step in global online tutoring.
Tutorvista has raised nearly $60 million as equity infusion during the past three rounds of funding and provides online tutoring to various geographies across the world with US being the primary market. The company is also into K-12 space, supplies digital content and technology platforms to various schools and has a growing presence in test preparation and tutions.
Marjorie Scardino, Pearson’s Chief Executive, said: “TutorVista is an innovative and effective education company that we have worked with and respected for several years. This acquisition - which we believe is the largest transaction in education in India by any company – signals our excitement about the vitality of India’s education sector.”
John Makinson, Chairman of Pearson India, said: “Today’s acquisition underlines Pearson’s commitment to education and skills development in India. The investment in TutorVista gives us control of the world’s largest online tutoring business and, crucially, a solid platform on which to build a leading presence in the Indian private schools sector. As the future chairman of TutorVista, I look forward to working even more closely with Krishnan Ganesh and his extraordinarily talented team in Bangalore.”
Krishnan Ganesh, Founder and CEO TutorVista, said: “We started TutorVista.Com to provide affordable education services and content globally. Together with Pearson, the world’s leading education company, we can make this happen even faster and help millions of students achieve their educational goals. TutorVista.com is already the largest consumer online tutoring company and with the help of Pearson we will now have an opportunity to take our high quality tutoring to schools and colleges directly.”
According to a statement from Pearson, Indian government currently invests $40 billion each year or three per cent of GDP in education, while Indian consumers spend more than $40 billion on private educational institutions and services. Both segments of the market are growing rapidly as a result of government commitment to increase the quality of and access to learning opportunities as a means of sustaining economic growth and reducing poverty.
This acquisition further supports Pearson’s goals of building significant education companies in selected fast-growing markets and applying its learning services and technologies to support governments and institutions in making educational opportunities more accessible and more effective. In mid-2009, Pearson established a joint venture with Educomp, a publicly-traded learning company, to develop vocational and professional services for the Indian market.
The TutorVista acquisition follows recent investments in both acquisitions and organic growth opportunities in China, Brazil, Southern Africa and Nigeria.
Pearson expects the acquisition to enhance Pearson’s adjusted earnings per share and return on invested capital in 2012, its first full year.
