Pearson Plc, the world’s biggest educational publisher, has agreed to buy Chicago-based eCollege.com for $538 million to add online degree courses in the U.S.
ECollege was founded in Denver in 1996 and employs about 250 people here. The company’s headquarters will return to Denver when the deal closes later this year, eCollege spokeswoman Kristi Emerson said.
The company moved its executive offices to Chicago in 2005 and has about 10 employees there. That office is expected to close, Emerson said.
Stockholders of eCollege will receive $22.45 a share, London-based Pearson said in a statement late Monday. That’s 7.1 percent more than Friday’s closing price.
ECollege went public in 2000, raising $63.2 million. The company develops software used by schools to run online classes. The technology works with about 180 U.S. colleges and universities to offer more than 1,000 degree, certificate and diploma programs.
Pearson will get $20 million of cash on eCollege’s balance sheet and $41 million of proceeds from the sale of eCollege’s Datamark student-enrollment business to a group of investors led by Oakleigh Thorne, eCollege’s chairman and chief executive, according to a company statement. The cash will give Pearson a net purchase cost of $477 million.
ECollege acquired Salt Lake City-based Datamark in 2003 for $75 million.
Thorne will step down from eCollege, with Matthew Schnittman, the current president of the eCollege eLearning Division, joining Pearson as president of eCollege.
Pearson is expanding its education business through acquisitions, including its May 4 agreement to buy Reed Elsevier’s Harcourt unit for $950 million.
“The acquisition meets our financial goals and supports our strategy of combining content, technology and services to advance learning,” Pearson chief executive Marjorie Scardino said in a statement.
Pearson, which also owns the Financial Times newspaper and publisher Penguin Group Inc., competes with McGraw-Hill Cos. and Houghton Mifflin Co. in providing textbooks, test marking and online materials.
Bloomberg News contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
