Pearson acquires EmbanetCompass for $650m Pearson, the education and publishing business that owns the Financial Times, announced its largest acquisition in over five years on Tuesday with the purchase of EmbanetCompass, a provider of digital services such as online degrees to leading non-profit colleges and universities in the US. The $650m cash deal will increase the share of revenues that Pearson derives from digital operations. Ahead of the announcement, the company has stated that over half its revenues will come from digital and services this year. Clearly this is the future of the business. It is primarily online," said Claudio Aspesi, media analyst at Sanford Bernstein. The company is on a path of acquiring businesses that offer full solutions as opposed to buying businesses purely for technology. The purchase could mark the last major deal under Dame Marjorie Scardino who is stepping down as chief executive of Pearson in January. She is handing over to John Fallon, head of the group's international education division. Analysts said the $650m purchase price was a sizeable multiple of privately held EmbanetCompass's revenues, expected to be about $130m in 2012. However, they noted comments from Pearson that the provider of online degrees had grown revenues strongly in each of the past three years. Pearson said it expected the acquisition would enhance adjusted earnings per share from 2014. Founded in 1995, EmbanetCompass has 580 employees and has partnerships with a number of US universities such as Boston University, Wake Forest and the University of Florida. The deal marks the largest acquisition by Pearson since its 2007 purchase of Harcourt Assessment and the international arm of Harcourt Education from Reed Elsevier for $950m. It will however reduce the company's firepower for further deals. Before the announcement, the company had indicated that, taking into account its desired credit rating, its headroom for further acquisitions was between £800m and £1bn. "They probably have cash for about one other deal of this size but not much more than that," said Mr Aspesi. The purchase was made from an investor group led by Technology Crossover Ventures and Knowledge Universe. It is subject to regulatory approval.