Pearson Buys NCS, Reports Pre-Tax Profits Of £123m

Pearson Plc announced today that it is to acquire National Computer Systems, the American commercial testing and educational services company in a deal worth $2.5bn. Reporting its six-month financial results today, the group said it will combine NCS with Pearson Education to create the world’s leading integrated educational company.

The deal will be financed by the issue of a £1.7bn rights issue, in which shareholders will be offered three new shares for 11 at the price of £10 a share. Shares in the group fell 115p – or 6% – to £18.95 at the news.

Pearson as a whole performed well during the six-month period ending June 2000. Pre-tax profits at the group rose to £123m from a loss of £20m for the same period last year, and operating profits were up 32% to £148m before goodwill, exceptional items and internet enterprises.

The Financial Times group reported a 24% increase in underlying sales and operating profits were up 29%. The group’s internet projects, which include ft.com, are set to break even by 2002, two years ahead of expectations.

Pearson Television’s merger with CLT-Ufa was completed last week, creating Europe’s largest integrated broadcasting and content company, RTL. Pearson has a 22% stake in the group, which was valued at £16bn when it made its debut on the stock exchange last week (see RTL Lists On Stock Exchange With Value Of £16.6bn).

Pearson: 020 7411 2000