UK media group Pearson has announced it is to sell its US Government Solutions division to American private equity firm Veritas Capital for $660m.

The deal consists of $560m in cash, $40m in preferred stock and 10% of the equity of the business.

Government Solutions designs, builds and operates systems for clients including several US government departments and London's Southwark borough council. It has also recently renewed two key contracts for Federal Student Aid and Centres for Medicare and Medicaid Services with the US government. 

Pearson acquired the business in 2000, when it purchased National Computer Systems, an educational testing and technology group, for £1.7bn. Since then, revenues at the unit have more than trebled, and operating profits in 2005 reached $46m.

Pearson has said it will use the funds from the deal to invest in further growth, both organically and through acquisitions, and to reduce group debt. 

Marjorie Scardino, Pearson's chief executive, commented: "Government Solutions has achieved exceptional growth as part of Pearson. It has a strong management team and an ambitious strategy for expansion, and Veritas will invest in and support those plans."