Pearson Snaps Up UK Citizenship Test Provider

The FTSE-100 education group Pearson (Xetra: 858266 - news) is buying the company which oversees the UK's national citizenship test in its first deal since selling the Financial Times and The Economist for more than £1bn.

Sky News has learnt that Pearson will on Wednesday announce the acquisition of the e-assessments division of Learndirect, which has been owned by LDC (LSE: 0O3G.L - news) , a private equity group, since 2011.

The move will accelerate Pearson's reshaping into an education and training-focused company, and will build on its global operations across school, higher education and job-related testing.

The purchase of the Learndirect unit will also mean that Pearson retains ownership of the Driver & Vehicle Standards Agency (DVSA) testing mandate, which is thought to be the largest online assessment contract in Europe.

Currently being delivered by Pearson, the contract to manage the theory test for learner drivers is due to transfer to Learndirect in September 2016.

Its ultimate retention by Pearson is notable because of a botched procurement process run by Government officials nearly two years ago which left taxpayers saddled with a £2.5m bill.

Ministers were forced to reverse a decision to hand the contract to Learndirect from 2014 after failing to conduct proper checks on the company.

Pearson Driving Assessments issued a formal challenge to the decision, resulting in it being granted a two-year extension to its deal.

Learndirect employees were informed of the sale of the e-assessments unit, which will become part of Pearson VUE, on Tuesday, insiders said.

The terms of the deal are unlikely to be disclosed, but the cost of the acquisition is understood to be in the tens of millions of pounds, meaning that it will not be considered a material purchase by Pearson's board, they added.

In addition to the DVSA test, Learndirect's e-assessments division oversees the Life in the UK test for aspiring British citizens on behalf of the Home Office, and numeracy and literacy tests to help select prospective teachers.

The other areas of Learndirect's business, which focus on apprenticeships and adult skills provision, will remain under LDC's ownership.

The brainchild of the Labour government which was elected in 1997, Learndirect was established in 2000 by Ufi, a charitable trust set up to use new technology to transform the delivery of skills across the UK.

For Pearson, which announced the sale of the FT and its shareholding in The Economist in rapid succession during the summer, the purchase will provide investors with a further glimpse of where John Fallon, the group's chief executive, believes its future lies.

"The company's broader strategy involves an increased focus on digital education and services including assessment and teaching," said a person close to the deal.

"Two-thirds of Pearson's revenues come from digital and services in the education sector, whereas ten years ago it was two-thirds print and one third digital and services, so that shift is clearly continuing."

Pearson and Learndirect declined to comment on Tuesday.