Pearson PLC (LSE:PSON) said it has bought the workforce assessment services provider, Personnel Decisions Research Institutes (PDRI), from SHL Group for an enterprise value of $190mln.
The FTSE 100 listed group said the deal, which will be funded by cash and existing liquidity, expands its services to US federal agencies and accelerates its strategy to capture new market opportunities.
“The acquisition will be accretive to growth and margins for our Assessment & Qualifications division, as well as driving returns for shareholders” the company said.
Pearson noted that PDRI has a “highly attractive financial profile” with an impressive revenue growth opportunity, good margins and strong cash flow conversion.“
In a statement, Andy Bird, chief executive of Pearson, said: "We are pleased to have the opportunity to expand this important market for Pearson and our assessments business. Pearson and PDRI share a culture and commitment of serving trusted, secure, and innovative assessment solutions to major employers and millions of people looking to establish and grow their careers. Together, we will have a stronger proposition and a larger platform from which to drive future growth."
Elaine Pulakos, chief executive officer of PDRI added: "Pearson has an excellent reputation in the assessments field, and we are excited to become a part of their growth strategy. There is a significant opportunity to learn from each other to further improve our products and reach more customers with our proven assessment and talent solutions."
Founded in 1975, PDRI has significant expertise in providing assessment solutions to the US federal government, one of the largest employers in the US with more than 4mln employees. In the year ending December 2021, PDRI recognised revenues of $33mln.
Completion of the deal is expected to occur during the first half of 2023.
In late Monday trading, Pearson shares were 0.9% higher at 927.60p.