Gets access to North American markets
MUMBAI: Education service provider Educomp Solutions is buying a 51% stake in US-based e-learning company Learning.com for $24.5 million.
The company is tapping internal accruals and reserves to fund the buy, which is its second strategic investment after the acquisition of Singaporean K12 company Ask n Learn.
Educomp managing director Shantanu Prakash said a majority of this $24.5 million has gone towards issue of fresh capital, and so, the money would stay within the company for growing its business.
Founded in 1999, Learning.com provides web-delivered curriculum and assessment, and has as many as 2 million students in schools across the United States. With this acquisition, Educomp will get distribution access to over 800 US districts, through which it can reach out to the North American market.
Prakash said Educomp hopes to take its own basket of offerings to American schools and bring Learning.com’s products to its 4 million users in India and Southeast Asia.
“Learning.com is expecting revenues of $15-16 million in FY08 and $20-21 million in FY09. Net profit in FY08 is expected to be $2 million and $4.5-5 million in FY09,” he said.
Educomp had earlier acquired ThreeBrix, AuthorGen, and Savvica. In April, the company had revealed its plans to buy a domestic preschool chain. It is also on the hunt for five-six operational K12 schools for Rs 40 crore each. Through these acquisitions, Educomp is looking at growing its Millennium brand of K12 schools to 25 from seven now.
The company, however, would upgrade its earnings guidance only after the April-June quarter, Prakash said. For this fiscal, it has given a guidance of Rs 550-580 crore for consolidated revenues and Rs 140-145 crore for net profit.
