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Pearson announced today that it was buying a controlling stake in the Indian online tutoring company TutorVisa for $127 million. Pearson had acquired a minority stake in the five-year-old company in the summer of 2010.

Here's the obligatory quotation from a Pearson executive in today's news: TutorVista is an innovative and effective education company that we have worked with and respected for several years. This acquisition, which we believe is the largest transaction in education in India by any company, signals our excitement about the vitality of India's education sector. That's from CEO Marjorie Scardino.

Vitality indeed. India's government currently invests about $40 billion a year -- 3% of its GDP -- on public education. Indian consumers spend more than $40 billion a year on private educational services. And that market is only expected to grow.

The acquisition of TutorVista is the latest in a series of moves made by Pearson to strengthen its position in the education industry, particularly in high growth global markets. In July of 2010, for example, Pearson acquired the Brazilian learning systems company SEB for $497 million. It's also made strategic moves in recent years in Nigeria and China.

Pearson is already the world's largest education company and world's largest book publisher. It's the owner of the Financial Times and Penguin.

For its part, the company Pearson just acquired, TutorVista, has four main focuses: providing digital content and technology platforms to public and private schools in India (approximately 3300 classrooms); offering online tutoring that connects instructors in India with North American college students (approximately 10,000 students per month); running test prep centers (60 facilities in southern India); and providing PD and curriculum design to K-12 schools (serving approximately 5000 students in India).

About 70% of Pearson's revenue comes from the education sector. And while 65% of that has been from the US market, the company has been expanding quickly into the global education market, where its revenue has increased by 17% over the past 5 years while its operating profits have tripled.

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Audrey Watters


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