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Pearson Moves Deeper Into Online Education With $650-Million Purchase

Pearson, a publishing and education company whose products include books, newspapers, and online services, announced a major acquisition on Tuesday that will deepen its commitment to becoming a major player in online education.

The company, which owns the Financial Times and the Penguin Group book publisher, shelled out $650-million in cash to buy EmbanetCompass, a business that provides support services to colleges and universities that are moving their programs online.

The announcement came on the heels of Pearson’s move last year to start a free, cloud-based learning-management system called OpenClass.

And it came less than a year after Pearson teamed up with a software company called Knewton to replace some of its software packages with programs that adapt to each learner with interactive tutors, quizzes, and explanatory videos.

“Pearson is deepening its bet on the digital future and has to be seen as a leader in that space,” said Trace A. Urdan, an analyst at Wells Fargo Securities who focuses on education businesses.

Some of the shift in emphasis from print to digital could be construed as a pragmatic reaction to the challenges that Amazon, ebooks, and online news sources have posed for print publishers.

But, said Mr. Urdan, “This is less a defensive move than an active investment in what they see as the next big thing, and a real opportunity in the higher-education space.”

Pearson acquired EmbanetCompass from an investor group led by Technology Crossover Ventures and Knowledge Universe.

EmbanetCompass helps colleges design online programs, recruit students, train faculty members, and keep tabs on student progress through data analytics.

Don Kilburn, chief executive officer of Pearson Learning Solutions, said the acquisition would allow the company to extend its reach in online education and to take advantage of the trend away from print.

“As more and more schools face budget cuts, they’re looking to online education as a way to increase access, achievement, and affordability,” he said. “We see this as a strong area of growth.”

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