Thomson Prometric, the Baltimore-based educational testing company that was once part of the former Sylvan Learning Systems, has been sold again - this time to Educational Testing Service, administrator of the SAT, for $435 million.
ETS is Prometric's largest customer, a partnership that began nearly 20 years ago, ETS officials said yesterday. Prometric delivers the TOEFL, GRE and Praxis teaching licensing exams for the Princeton, N.J.-based educational assessment and research company.
Once the sale is completed, expected in the third quarter pending regulatory approval, Prometric will become a for-profit subsidiary of nonprofit ETS. Prometric's operations and management will remain in Baltimore, ETS chief executive Kurt Landgraf said yesterday. Prometric had $317 million in revenue last year, according to ETS.
Prometric has 3,000 employees worldwide, including 400 in Baltimore. ETS officials don't expect any changes to the work force.
"Prometric is one of our most important delivery channels, so it's an extension of what we've been doing for a long time," Landgraf said. He added that Prometric will expand ETS' international presence in delivering technology-based testing and assessment services.
Prometric develops and delivers paper-and-pencil, Internet and computer-based assessment services through testing centers in 132 countries.
"ETS really seems to be filling out their suite of assessment products and services," said Nicole Engelbert, a senior education analyst at research firm Datamonitor. "They have their high-stakes and promotional exams at the K-12 level, college entrance exams and college-level achievement-type tests."
"Prometric adds an additional component to their full suite," Engelbert said.
The marketplace is growing for testing and assessment services for occupational licensing and certification as well as education, particularly standardized testing related to the No Child Left Behind Act, said Thomas Toch, co-director of Education Sector, a Washington think tank. Last year, the competitive U.S. education testing industry - which encompasses kindergarten-through-12th grade to college-entrance assessments, testing and preparation services - was valued at $2.3 billion, Toch said.
ETS, traditionally known for administering college admissions and other specialty tests, has been aggressively pursuing business related to the No Child legislation in recent years, Toch said. Prometric's online expertise "could provide valuable leverage in the NCLB market," he said.
Under the agreement announced yesterday, ETS agreed to pay $310 million in cash and $125 million in a note due in 2014.
The purchase price is more than half of what Canadian electronic media conglomerate Thomson Corp. paid Baltimore-based Sylvan for Prometric in 2000 at the height of the dot-com boom. Thomson paid about $775 million to Sylvan, which has since split into two Baltimore companies, Laureate Education Inc. and Educate Inc.
Landgraf said ETS is also receiving CapStar, a testing business it sold to Thomson for about $200 million in 2004, as part of the deal.
Prometric executives were unavailable for comment yesterday.
Thomson said in a statement yesterday that the Prometric sale completes its previously announced strategy to sell assets of its learning business. Thomson announced in October 2006 that it planned to focus on electronic products and services to business and professional customers.
A spokesman for Thomson Learning, the education publishing segment of Thomson Corp., could not be reached for comment yesterday.
Thomson agreed last year to sell NETg, a provider of corporate training services, to Skillsoft PLC for $285 million. In May, Thomson announced that it will sell higher-education assets for $7.75 billion in cash to funds affiliated with Apax Partners and OMERS Capital Partners.
Proceeds from the sale will help Thomson pay for London-based Reuters Group PLC, which the company agreed in May to buy for $17.5 billion to create the biggest financial news and information company.
With the purchase of Prometric, ETS gets the company's more than 400 clients in the professional, governmental and corporate and information technology markets, including the Association of American Medical Colleges and the NASD, a private-sector regulator of the U.S. securities industry.
Bloomberg News contributed to this article.
Drake Prometric develops a computerized accreditation test for Novell, an information technology company.
Sylvan Learning Systems Inc. buys Prometric from Drake to expand academic and professional test development and test delivery business.
Thomson Corp. buys Sylvan Prometric for about $775 million.
Prometric opens Asia Pacific headquarters in Singapore to expand overseas.
Prometric acquires CapStar, which develops assessment and testing services for corporations, national associations and government agencies, from Princeton, N.J.-based Educational Testing Service.
Prometric opens new European headquarters in London.
Prometric moves its Baltimore headquarters from Harbor East to new tower at Canton Crossing.
ETS agrees to buy Prometric for $435 million.
[Source: Thomson Prometric, The Sun archives]