Pearson In Big India Education Moves
Thursday, June 25, 2009
Pearson, the British publishing group, said Wednesday that it is partnering with an Indian education company and an Internet tutor, as it increases its focus on the huge Indian market. Pearson is buying half of the vocational training business of Educomp Solutions, a Delhi education company that creates software and training systems for 23,000 schools. Pearson is also buying a 17.2% stake in TutorVista, an online tutoring company that brings together Indian tutors and American students. Together, the deals are valued at $30 million, Pearson said, but the company did not provide more financial details. The Wednesday deals are “just the first step” for Pearson in India, Khozem Merchant, deputy chairman of Pearson India, said during a news conference in New Delhi. “The entire Pearson group has a sharp eye on opportunities in India,” he said. Pearson plans to publish an edition of the Financial Times newspaper in India as soon as it gets the licenses and approval it needs from the government, executives said Wednesday.
India’s Congress-led government, which was recently re-elected, has made education a top priority for the years ahead. Already, the Indian government spends about $30 billion on education a year, Pearson estimates, and private citizens spend another $50 billion. India’s youthful population is both the country’s greatest asset and a growing concern. About one-third of the country’s 1.2 billion people are younger than 14, according to recent estimates. India is known for its top-notch engineering colleges, but the country is also plagued with thousands of mediocre schools at all levels that turn out students who are unqualified for further study or all but the most menial jobs. Pearson has been building its education business, particularly its English-language training, in China and Latin America in recent years. “In India, we’ve probably underinvested,” Vivek Goyal, president and chief executive of Pearson in India, said during the Wednesday news conference. Educomp, which is based in New Delhi, makes classroom plans, trains teachers, audits schools and sells information technology plans to computerize classrooms. The company’s vocational training program is in its nascent stage, Pearson said. The new joint venture will concentrate on training students for blue-collar jobs, Mr. Goyal said, including hospitality, food preparation, security and construction. Government-funded programs and potential employers would pay students’ tuition. Shares in Educomp rose 10.9% on the news, bringing the company’s market value to 59 billion rupees, or $1.2 billion. TutorVista, the Internet tutoring company, provides online math, English and science tutors for students from kindergarten through 12th grade. The online tutors, who are based in India, cost about one-fifth of those based in the United States, Pearson said.