Investment firm Apollo Global Management has announced that it is considering making a cash offer for UK-based educational publisher Pearson.

In a statement, Apollo said that it is “in the preliminary stages of evaluating a possible cash offer by certain of Apollo’s affiliated funds for Pearson.”

Apollo has until 8 April to announce either its firm intention to make an offer for the company or that it does not intend to proceed with the takeover.

Barclays is acting as advisor to Apollo, according to a statement.

Following the announcement, shares in Pearson soared almost 20% on the London Stock Exchange today, giving the company a market valuation of more than £6 billion.

Pearson provides textbooks for schools, higher education institutions and professional training courses as well as digital learning solutions and online tutoring products in 200 countries worldwide.

The company, that was already suffering from a difficult transition from print to digital, was badly affected by the pandemic and recorded a sharp decrease in sales. Its total revenue fell 12% to £3.4 billion in 2020 and its adjusted operating profit decreased to £313 million in the period, from £581 million a year earlier.

In 2021, revenue stabilised at £3.4 billion, while adjusted operating profit saw a slight increase to £385 million.

Pearson chief executive Andy Bird, a former senior Disney executive appointed in October 2020 to lead the publishing company and shape its digital transformation, said in a recent statement:  “Pearson has been reorganised and refocused with a new purpose. We are a digital first business, with consumer grade products, and the momentum across the company underpins our confidence for further growth in 2022 and beyond.”

In January 2022, Pearson acquired Credly, a digital workforce credentialing company in which it already owned a nearly 20% stake, in a deal value at around $200 million. This comprised an upfront consideration of approximately $140 million, Pearson’s existing stake valued at about $40 million and an additional deferred consideration.

Date published: 11 March 2022

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