NEC Agrees to Be Acquired by Harcourt

National Education Corp., which became a coveted prize after undergoing a dramatic turnaround in the last year, has agreed to be acquired by publisher Harcourt General Inc. for $21 a share, or $811.6 million.

The acquisition of Irvine-based NEC, a leading provider of off-site professional training, would give Harcourt another distribution channel for its extensive lineup of educational books.

The deal eclipses an all-stock buyout agreement that NEC entered in March with Sylvan Learning Systems Inc., a Baltimore-based operator of learning centers for children. Based on Sylvan’s closing stock price of $33.625 a share Tuesday, that deal would have been worth about $750 million.

If Harcourt’s buyout is completed, NEC’s corporate headquarters in Irvine will be closed and up to 40 employees now based there will lose their jobs. Harcourt said it would move quickly to consolidate the administrative operations of NEC into its Chestnut Hill, Mass., headquarters.

However, Harcourt plans to keep largely intact NEC’s remaining operations, which include the Steck-Vaughn Publishing school supplement division in Texas, the National Education Training Group computer-training business in Illinois and its ICS Learning Systems correspondence school unit in Pennsylvania.

Harcourt portrayed the planned merger as a marriage of complementary businesses that would benefit its book and retailing empire.

“NEC’s diverse mix of educational products and services and distribution channels fit extremely well with our existing publishing businesses, and will help accelerate our long-term growth in the dynamic market for broad-based education services,” Harcourt Chief Executive Richard A. Smith said.

More than two years ago, Harcourt considered buying NEC but decided it was too troubled. NEC lost a cumulative $160 million in the three years ended in 1995. Its computer-based training division was bleeding the company dry, and other divisions needed help too.

But after Harcourt walked away, NEC directors changed management, bringing in Chief Executive Sam Yau in May 1995.

Yau refocused each division, and the company earned $21.4 million on revenue of $288.8 million last year. “We saw that NEC had come a long way toward fixing itself,” Harcourt spokesman Peter Farwell said. “Sam’s come in and done a great job in turning them around, though the turnaround is not complete.”

Yau, 48, who plans to leave the company, said he was “impressed with the level of commitment and level of investment that Harcourt General was willing to make.”

NEC’s stock rose 25 cents to close at $20.75 on the New York Stock Exchange. Harcourt’s stock fell 25 cents to close at $46.875, also on the NYSE.

Times staff writer James S. Granelli contributed to this report.