TransAsia Lawyers, Morgan, Lewis & Bockius and Maples and Calder have advised British publishing giant Pearson on its recent agreement to purchase all of the outstanding shares of Global Education and Technology Group (GEDU), a Nasdaq-listed English-training company in China for about $294 million.
The deal is yet another sign of how China’s fast-growing English-training businesses are becoming attractive targets for overseas investors, given that the nation is home to the world’s largest population of English learners.
The move will boost Pearson’s market share in China from eight to 60 cities, and follows the company’s takeover of Wall Street English, another chain of English-learning centres in China, in 2009.
TransAsia’s team was led by its Beijing-based managing partner Philip Qu. Representing GEDU were O’Melveny & Myers and Conyers Dill & Pearman, which acted as local and Cayman counsel for GEDU respectively. Credit Suisse Securities served as exclusive financial advisor to GEDU.
“This is the largest acquisition of a China-based business by a U.K. company this year, and is also generally one of the largest deals in the market,” said Charlie Engros, Morgan’s lead partner in the deal.
Engros also said that on the legal front, the deal needed putting together a structure that would work under PRC, Cayman Islands and U.S. laws. Speaking on how Morgan worked its way through these issues, Engros said, “We took advantage of the relatively new Cayman Islands merger procedure which has, I believe, only been used in one acquisition previously of a Cayman company listed in the U.S.”
"Through organic investment and complementary acquisitions, we're learning a lot about the very significant growth opportunities we see in China and about the value of combining our content and technology with high-quality school networks," said John Fallon, chief executive of Pearson's international education business, in a statement on Nov. 21.
GEDU operates a chain of 450 test preparation and training centres across China. The group’s board of directors approved the merger agreement with Pearson and recommends its shareholders to vote for the transaction. If all goes as planned, the merger is expected to be completed by the end of this year.
London-headquartered Pearson is the world’s largest educational publisher and business, and is best known for publishing Financial Times and owning book publisher Penguin.
Morgan has represented Pearson for over a decade, including advising on the company’s M&A activities in the U.S. In 2011, Morgan has acted on Pearson’s takeovers of Connections Education for $400 million and SchoolNet for $230 million. ALB
Other related stories:
