Daily Mail owner sells education business for £293m amid pandemic woes
The Daily Mail and General Trust (DMGT) has announced the sale of its education technology business for around $410m (£293.4m) as it scrambles to free up cash during the pandemic.
The Daily Mail owner has signed two separate contracts to offload Hobsons, which provides education and career advice for students.
He added that they were a “clear demonstration of the benefits of [DMGT’s] strategy”.
Hobson’s Naviance business, which offers college and career advice to pupils, and its Intersect business, which matches students with US colleges, will be sold to higher education technology platform Power School for $320m.
Its college-focused Starfish business will be sold to EAB, a Washington-based education company, in a deal worth $90m. Both sales are subject to closing conditions.
Paul Zwillenberg, chief executive at DMGT, heralded the sales as a “major milestone in DMGT’s transformation”.
Hobsons underwent a large-scale restructure in 2017, offloading its Hobson’s Solutions arm for £1.6m. DMGT has previously described the firm as the “leading provider of student success solutions in the US”.
DMGT suffered a heavy blow during the pandemic last year as lockdowns hammered print circulation, with the company reporting a 44 per cent plunge in operating profit in the nine months to June.
The lifting of lockdown restrictions over the summer saw the publishing group recover slightly, though underlying revenue still fell 15 per cent during the last quarter.
Zwillenberg said the company will continue to streamline its portfolio, which has slimmed down from operating across 10 sectors in 2016 to just four in 2021.
He added that the proceeds of the Hobsons sale “will strengthen DMGT’s existing net cash position, further enhancing DMGT’s significant financial flexibility.”