Acquisition of AGS Publishing

Pearson PLC
23 June 2005


23 June 2005

                       PEARSON TO ACQUIRE AGS PUBLISHING

                TARGETS GROWTH IN FUNDING FOR AT-RISK STUDENTS;
             STRENGTHENS POSITION IN SCHOOL TESTING AND PUBLISHING

Pearson, the international media and education company, today announced the
acquisition of AGS Publishing from WRC Media for $270 million in cash. The
acquisition will strengthen Pearson's education business in two fast-growing
segments of the US School market: testing and publishing for students with
special educational needs.

AGS, based in Shoreview, Minnesota, publishes assessments and curriculum
materials for US school psychologists, teachers and students. It has a
particular focus on supporting students who are at-risk or performing below
grade level, including those whose first language is not English. These areas
are attracting new attention and funding with the US federal requirement under
No Child Left Behind (NCLB) that all students achieve 'Adequate Yearly Progress'
towards mandated state standards in reading, math and science.

According to the US Department of Education, approximately three million
students (ages 6-21) are being served in the learning-disabled category of the
Individuals with Disabilities Education Act (IDEA). The Special Education
Expenditure Project calculated that nationwide, expenditures for educating
students with disabilities made up almost 22 percent of the total expenditures
for elementary and secondary educational services. The number of English
language learners aged 5-17 in the US grew from 2.4 million in 1990 to 3.5
million in 2000, according to the US Census.

AGS has grown rapidly in recent years, with sales increasing by more than 20% in
both 2004 and the year to date. AGS's operating profit was $23m in 2004 before
corporate overheads and is expected to increase significantly as the business
becomes part of Pearson. Pearson expects the acquisition to enhance adjusted
earnings per share from 2006, its first full year, including integration costs,
and to be earnings neutral in 2005. Pearson also expects the acquisition to meet
its cost of capital in 2006 and to enhance return on invested capital from 2007
*. AGS's net asset value was $26m at 31 December 2004.

Steve Dowling, President of Pearson's School companies, said: "The central goal
of federal education policy is for all students to demonstrate progress towards
state standards in key subjects. That requires a focus on students with special
educational needs. AGS reaches these audiences with individually and group
administered assessments and fills out our curriculum offering from middle
school to high school for low achieving students. This acquisition extends our
position in a fast-growing market segment and adds to the intellectual property,
growth and profitability of our school business."

In school testing, AGS publishes a range of copyrighted assessments,
administered by school psychologists or special education professionals with
individual students, to assess areas including cognitive ability, educational
achievement, speech/language and personal and social development. AGS also
publishes a series of 'formative' assessments, administered in the classroom, to
track student performance in reading and math towards 'Adequate Yearly Progress'
under No Child Left Behind. The AGS assessment products enable teachers to
diagnose special needs, assess where students are struggling and prescribe
remedial instruction or intervention.

AGS's assessment products add breadth and strong branded assessments in the area
of special educational needs to Pearson's Assessments & Testing business, a
leader in psychological and educational assessments. Pearson has particular
strength and leadership in NCLB-required high stakes testing including test
development, scoring, processing and reporting.

In school publishing, AGS's curriculum-based instructional materials complement
Globe Fearon, an imprint of the Pearson Learning Group. The AGS products include
textbooks and workbooks in core curriculum areas, test preparation and
independent life skills. The textbooks are geared to a low reading level but
with content and design appropriate for middle and high school students. These
materials support the individual learning needs of students who are at-risk and
require educationally appropriate materials.

The acquisition, which is subject to regulatory approval, is expected to be
completed in the third quarter. AGS will become part of the Pearson School
Companies with its president, Kevin Brueggeman, joining the Pearson team and
reporting to Steve Dowling.
AGS's assessment and curriculum staff and product lines will remain in the
Minneapolis area.

* Note: operating profit, earnings and ROIC guidance in this announcement is
stated before amortisation of intangible assets. IFRS3 requires that intangible
assets other than goodwill (eg intellectual property, customer lists) are 'fair
valued' at the point of acquisition and amortised through the P&L (with no cash
impact) over their estimated useful lives. We have begun the fair valuation of
AGS Publishing's intangible assets as required under IFRS3 and we expect to
complete it around the time of closing.

For more information:

Luke Swanson/ Charlotte Elston: [phone]

Wendy Spiegel: 800 745-8489/ David Hakensen: 952 681 3040


Notes to Editors:

About AGS Publishing
For nearly fifty years, AGS Publishing has been a leading provider of products
and services to assess cognitive ability, achievement, behaviour, speech,
language, and personal and social adjustment. The company's educational testing
and measurement services are used by schools and education systems nationwide to
support quantitative evaluation of educational progress. In addition to testing
and measurement tools, AGS Publishing provides curriculum materials for
struggling students. Through scientifically based and technology-enabled
products and services, AGS Publishing continues to stand with educators as
partners to emphasize the skill development that is essential to lifelong
learning.

About Pearson Education
Educating 100 million people worldwide, Pearson Education (www.pearsoned.com) is
the global leader in educational publishing, providing scientifically
research-based print and digital programmes to help students of all ages learn
at their own pace, in their own way.  While virtually all students in America
learn from a Pearson programme at some point in their educational career, nearly
25,000 US schools and one million teachers and students use Pearson technology
to help instruct preK-12 students and manage how they are doing.  Pearson
provides schools with custom services to create, deliver, score and report
educational assessments, both in print and online, that help promote learning.
In Higher Education, about three million college students are currently pursuing
their courses online using Pearson Higher Education's products. The company is
home to such renowned publishing brands as Pearson Prentice Hall, Pearson
Longman, Pearson Scott Foresman, Pearson Early Learning, Pearson Learning Group,
Pearson Digital Learning, and Pearson Addison Wesley.  Pearson Education is part
of Pearson (LSE: PSON; NYSE: PSO), the international media and education
company.  In addition to Pearson Education, Pearson's primary operations include
the Financial Times Group and the Penguin Group.

About Pearson Assessments

Pearson Assessments is the premier provider of psychological assessments
and scoring solutions. For more than 40 years, it has provided tools for use by
professionals to help assess adult personality, child and adolescent
personality, biopsychosocial issues, achievement and development, and career
interests and skills in a variety of settings.

About Pearson Learning Group
The Pearson Learning Group is a leading publisher of supplemental materials for
a wide range of ability levels for grades preK-12, and includes the imprints
Modern Curriculum Press, Dale Seymour Publications, Celebration Press, and
Dominie Press, as well as Globe Fearon, and Globe Fearon's Pacemaker Curriculum
for special education students, serving middle and high school students.




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