New Delhi: In an indication of global interest in India’s education sector, publishing and education conglomerate Pearson Plc on Tuesday bought a 59% stake for Rs577 crore in TutorVista, an online tutoring firm.
The London-listed firm had, in 2009, acquired a 17% stake in the local firm, and will now control 76% of the company with a total investment of Rs631 crore.
Around 4% is held by small investors and the remaining is owned by promoters K. Ganesh and his wife, Meena Ganesh, who founded the firm in 2005.
Pearson could raise its stake to 80% by the end of February, Ganesh said.
John Makinson, chairman of Pearson India, termed India’s education sector as “exciting”, and said Tuesday’s acquisition was a strategic investment for his company’s expansion plans in the country.
The Bangalore-headquartered TutorVista operates in four business segments—online tutorials; digital content and information and communication technologies for schools; test preparation and offline coaching to students; and runs 19 K-12 schools.
Chief executive Ganesh will continue in his present role, the companies announced on Tuesday.
“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,” Makinson said.
TutorVista employs 2,000 teachers and 800 staff across its business segments. There are around 5,000 students in its 19 K-12 schools, which it expects to expand to 100 in five years.
“This deal indicates that global leaders are accepting Indian education models,” said Narayanan Ramaswamy, executive director, education, at consulting firm KPMG. “India is already the biggest base for education and you will see more money flowing to this sector. While TutorVista now will have access to global best practices available with Pearson, it will make Pearson a little bolder to roll out its education plan in the country.
Pearson operates in 60 countries and is now looking at emerging markets such as China, Brazil, South Africa and India for expansion. It owns brands such as Penguin books and the Financial Times newspaper. It also has a significant presence in computer-based testing and English language testing.
Pearson formed a joint venture in 2009 with another Indian education company, Educomp Solutions Ltd, to run a chain of vocational education centres branded IndiaCan.
There are no immediate plans to list the firm on the bourses, said Khozem Merchant, president of Pearson India. “If it becomes a $1 billion firm in three to five years, then that could be a good time to enter the market,” he added.