Updated from 11:14 a.m. EDT
Shares of educational testing and services provider
National Computer Systems
surged Monday, following news that British publisher
will acquire the company at a 26% premium to Friday's closing stock price.
In a cash deal valued at $2.5 billion, Pearson will pay $73 a share for NCS, a significant premium over the stock's closing level of $58.13 last Friday. That caused shares of NCS to rocket higher by 13 3/4, or 24%, to close Monday at 71 7/8.
Pearson, the world's largest publisher of educational materials as well as the
, says the purchase of NCS will give it a bigger foothold in the market for education-related software, services and technology.
NCS, based in Eden Prairie, Minn., sells software, services, systems and Internet-based technologies that collect, manage and interpret data. While three-quarters of its business is in educational testing and management, the company also serves other data-management markets, and was one of the four processors of the U.S. 2000 census for the U.S.
Pearson Education was formed in November 1998 through the acquisition of the
Simon & Schuster
education business and its subsequent merger with
Addison Wesley Longman
NCS will become part of the publisher's Pearson Education subsidiary, and Peter Jovanovich will remain chief executive officer of the unit. Russ Gullotti, the chairman, president and CEO of NCS, is planning to retire by June 2001 for health reasons, but will play a role in integrating the two companies until then. Pearson says it will eventually hire a new CEO for NCS.