Outlook: US deal sends Scardino to the top of the class

CAN Marjorie Scardino do no wrong? During her first year in charge at Pearson, she has proved herself adept at clearing up the mess left behind by her predecessors. Now she's managed to make an acquisition which the City just loves. The purchase of Simon & Schuster's educational publishing divisions for pounds 2.2bn is just the kind of deal that Pearson should be doing.

Nor does she appear to be making the old Pearson mistake of overpaying. A multiple of 2.5 times sales is respectable for a business reckoned to be growing at 10 per cent a year, while Pearson kept the numbers manageable for a cash purchase by immediately offloading the unwanted professional and reference bits to a US buyout fund. Other out of place assets within the new Pearson, such as Madam Tussauds and perhaps even Lazard Brothers too if tax difficulties can be overcome, are bound to follow.

Pearson won the bidding from under the noses of Rupert Murdoch's News International and Kohlberg Kravis Roberts, king of the junk bond deal. That will improve Ms Scardino's street cred no end. But the most encouraging aspect of the deal is that it makes strategic sense - a consideration that was sadly absent in the pre-Scardino days. Gone are the disastrous forays into unrelated businesses, of which Mindscape, the computer games group which was finally sold in March, was just the most expensive example.

Instead, Pearson has taken an industry in which it is already strong - through Addison Wesley Longman - and added a similar business. Pearson looks to be getting into the market at just the right time. The shift towards lifelong learning, the increasing use of computers in schools and the growing popularity of English around the world will work strongly in Pearson's favour.

The only nagging worry is whether regulators will allow it. Precise figures are hard to come by, but it looks as though Pearson will control about a quarter of the US schools market. With the US authorities in a trust- busting mood at the moment, an automatic thumbs up can hardly be taken for granted. Still, Ms Scardino deserves nothing but praise. When her appointment was announced in 1996, Pearson's share price fell on fears that she wasn't heavyweight enough. Those who sold out at that time must be kicking themselves.