Rosetta Stone Acquires Lexia Learning, Expands in Brazil

Rosetta Stone, the world-famous provider of language-learning software, has moved into the literacy sphere by acquiring Lexia Learning Systems, which services 14,000 schools and 1 million students who are learning to read. Rosetta Stone offers multimedia language-learning software for both children and adults. The acquisition will allow Rosetta Stone to get access to Lexia’s adaptive [...]

Rosetta Stone, the world-famous provider of language-learning software, has moved into the literacy sphere by acquiring Lexia Learning Systems, which services 14,000 schools and 1 million students who are learning to read.

Rosetta Stone offers multimedia language-learning software for both children and adults. The acquisition will allow Rosetta Stone to get access to Lexia’s adaptive learning technology and to expand its presence in the education technology sector.

According to David F. Carr of Information Week, under the terms of the deal, Rosetta Stone will pay $22.5 million in cash to acquire Lexia Learning Systems, to be completed in early August.

Earlier this year, Rosetta Stone purchased online LiveMocha, a cloud-based language-learning service, for $8.5 million in cash.

Following the addition of Lexia, enterprise sales to schools will account for about 30% of the company’s business, said CEO Steve Swad, who has steered Rosetta Stone since February 2012.

“The kids market is a strong market, and one that needs our products and embraces technology naturally.” The Rosetta Stone brand is strong enough that parents and educators will trust it to deliver adjacent products, he said. With more than $100 million in cash on hand, the company may make additional acquisitions if they will help accelerate its strategy, he said. Meanwhile, Rosetta Stone now has an additional product to offer the more than 20,000 K-12 school systems around the world who are its customers, Swad said.

According to Swad, Rosetta Stone and Lexia products would together offer English reading lessons for English-as-a-second-language (ESL) students in the U.S.

Boston, Massachusetts-based Lexia recently launched Lexia Reading Core5, a program to prepare pre-K to grade 5 students for the Common Core State Standards. In June 2013, the program was selected for multi-year, multi-million dollar statewide implementation in Kansas, providing tens of thousands of students with access to the program.

According to Lexia, schools and districts nationwide are increasing embracing its Lexia Reading Core5 as their reading program of choice for the 2013–2014 school year.

Lexia will also advance Rosetta Stone’s ability to deliver adaptive learning, which means that the teaching software analyzes student responses to identify strengths and weaknesses and adapts its instruction to deliver better results for each student, Swad said.

According to Angelica Mari of ZDNET, Rosetta Stone has also signed two significant contracts with Brazilian organizations to boost its footprint in Brazil.

Rosetta Stone has formed a partnership with Rio de Janeiro-based university Estácio for a range of courses as components of postgraduate degrees.

From July 2013, “those enrolled postgraduate distance education courses will be able to opt from a range of 30 language Rosetta Stone modules for two semesters.”

In addition, Rosetta Stone has entered into a partnership agreement with the Brazilian Lawyers Institute that would provide to its 330,000 members as well as their immediate families the language courses offered by Rosetta Stone.

Rosetta Stone’s courses focus on language learning and pronunciation improvement. The courses have been used by more than 37,000 businesses worldwide, including 20,000 educational organizations.

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