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Exclusive: Discovery considering sale of education division

Discovery Communications, the global media firm, is considering spinning off its education division, EducationInvestor understands.

Four sources close to the matter said Goldman Sachs had been hired to conduct a review of the US-based business, and that a sale was one option on the table.

However, another suggested the firm may only be looking for a strategic investment. 

​A spokesperson for Discovery Education said the firm had “no comment at this time”. 

Discovery Education provides K-12 resources for schools in the US and Europe, and claims more than 35 million students use its content.

It is trying to extend its international reach after acquiring UK-based video business Espresso in 2013, and says that Africa and Asia are targets.

However, one source said “performance in the division was underwhelming and it had experienced significant management churn”.

Another said Discovery felt the unit was no longer core to its business, which is focused on television content.

Sales in Discovery's 'education and other’ segment – which also includes its studio production businesses – increased from $140 million to $160 million in 2014. 

But adjusted operating income before depreciation and amortisation fell from $30 million to $6 million.

At the time, the firm put the slide down to “investments in the production of global content intellectual property, additional costs associated with these business combinations and investments in digital textbooks”.

It comes weeks after Rupert Murdoch’s News Corp finalised a sale of its education division, Amplify.

The company, which provides hardware and software for schools, was sold to its management for an undisclosed sum, following a $371 million write-down in the fourth quarter. 






 


Posted on: 13/10/2015




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