Pearson, publisher of the Financial Times, said Monday it has sold its Pearson Government Solutions unit to Veritas Capital for $560 million plus a continuing equity stake.
Government Solutions, based in Arlington, Virginia, designs and operates systems to provide information, benefits and services to customers. Its clients include the U.S. Departments of Education, Health and Human Services, Defense, Justice and Labor. The company has 5,500 employees.
In 2005, Government Solutions contributed $46 million of operating profit to Pearson. It had gross assets including goodwill of $573 million on June 30.
The purchase price consists of $560 million in cash, $40 million in preferred stock and a 10% stake in the business.
Pearson acquired Government Solutions in 2000 when Pearson took over the educational testing and technology company National Computer Systems Inc.
Veritas Capital, based in New York, is a private equity firm specializing in government services, media, defense, aerospace and consumer products industries.
Pearson said it intends to use proceeds from the sale to invest in its business, including through acquisitions, and to pay off debt.
Pearson shares were up 0.9% at 768.5 pence in morning trading on the London Stock Exchange.