e-Literate

Present is Prologue

Tag: Cengage Learning

  • Initial Thoughts on McGraw-Hill Education Acquisition

    Update (12/1): Added excerpts from NY Post article re. Apollo holding of Cengage debt

    Earlier this week came the official news that McGraw-Hill Education (MHE) was being purchased by Apollo Global Management, a publicly-traded global alternative investment firm – roughly the equivalent of private equity in nature. Based on the PR Newswire report:

    The McGraw-Hill Companies (NYSE:MHP) (“the Company”) today announced it has signed a definitive agreement to sell its McGraw-Hill Education business to investment funds affiliated with Apollo Global Management, LLC (NYSE: APO) (collectively with its subsidiaries, “Apollo”), for a purchase price of $2.5 billion, subject to certain closing adjustments.  As part of this transaction, McGraw-Hill will receive $250 million in senior unsecured notes issued by the purchaser at an annual interest rate of 8.5%.  The transaction, which is expected to close in late 2012 or early 2013, is subject to regulatory approval and customary closing conditions. [snip]

    The McGraw-Hill Companies announced in September 2011 it would separate into two industry-leading companies following a year-long strategic portfolio review.

    As noted in the article, this spinoff of the education division has been in the works for over a year, based on recommendations from a hedge fund investor in 2010 that led to a year-long strategic review. This review culminated in the Sep 2011 decision. It is clear from this review that MHE is a profitable, slow-growth (or no-growth) company.

    McGraw-Hill said on Monday [Sep 12, 2011] that it would break itself up, spinning off its education division to focus on its business information unit in an effort to lift its stagnant share price.

    The remaining business will concentrate on the higher-growth operations of Standard & Poor’s, along with the financial data provider Capital IQ and the energy and metals information service Platts. McGraw-Hill also said that it would cut costs and buy back $1 billion in stock this year. [snip]

    Several [companies], like Kraft and now McGraw-Hill, are splitting their operations into a high-growth operations and a lower-growth one that nonetheless generates steady profits and could pay a big dividend [emphasis added].

    (more…)

  • Cengage Learning: It Gets Better

    I don’t always agree with my employer’s political stances, but this is one that makes me proud:

    Thanks to Jane Snyder for pointing this out to me.

  • Rethinking Assumptions: Part 1

    I have long promised that I would clear some time to write about what I’m learning from my new job at Cengage. Well, finally, this post is my first installment. Coming at the design of digital learning environments from a textbook publisher’s perspective has been enlightening in several respects. First, in the world of the LMS, we have tended to start with a generic model and put all the specifics into what we tend to call the “long tail.” It’s important, but it’s still the tail. But for textbook publishers, the tail wags the dog, so to speak. We don’t just think about people who want to teach and learn. We start by thinking about teaching and learning English. Or math. Or world languages. Or music. It’s always quite specific. Second and relatedly, we don’t start by making a list of all the tools and activities that one needs for a class. We start from the content and then think about the tools and activities that are necessary to teach that content. Third, because textbook publishers generally sell to teachers and students rather than institutions, there is more of a focus on (wonder of wonders) teaching and learning. The institutional concerns are there, but the enterprise sale comes after delivering a quality educational experience. All too often, the dynamics of the LMS market put things the other way around. And finally, there is some advantage to coming late to the game and being able to start with a blank sheet of paper. So all in all, it’s a fascinating place to be. In this first post in the series, I’m going to talk about a basic change in orientation than undergirds some of the innovation we’re going to be seeing in digital learning environments over the next few years.

    (more…)

  • A Promotion

    Last week I was promoted from senior program manager for the apps program for MindTap (called MindApps, aptly enough) to senior program manager for all of MindTap. In the short run, this means that my light blogging schedule will continue for a while as I adjust to my new position—probably at least through the end of the summer. But if you can be a little patient, I expect to have lots to say, as I am learning a ton and rethinking a lot of my positions about the future of educational technology.

    I am very, very excited about MindTap, not only because I think it’s a great product in and of itself, but also because it is a sign that we are finally breaking the log jam that has been impeding large-scale innovation in educational technology for the past decade. I’ll be talking about this (and demonstrating MindTap) in my closing keynote at the Moodle Moot next week in California and expect to have a screencast demo of MindTap posted here to e-Literate relatively soon afterward.

  • Textbook Publishers and OERs

    Not too long ago, The Chronicle ran an piece called “Publishers Criticize Federal Investment in Open Educational Resources.” The meat of the article was some quotes of textbook company executives on a panel at an SIIA conference speaking out against a provision in a United States Department of Labor grants program that requires course materials being produced for grant-supported courses to be released under a Creative Commons Attribution license. Here’s a taste of their comments:

    “I think it’s very dangerous for them to be in the product business,” said Bill Hughes, vice president of business development and innovation at Pearson Education.

    “There’s no free lunch,” said James Kourmadas, vice president of strategic marketing at McGraw-Hill Higher Education.

    “I fear when big bucks from government is put into certain places, it actually stops pushing people to innovate,” said Kevin Wiggen, chief technology officer of Blackboard Xythos….

    “I think what the industry says is that we don’t see the point in the government collecting up taxpayer money and trying to rebuild an industry from scratch,” said Mr. Kourmadas of McGraw-Hill.

    To my esteemed fellow textbook industry professionals, I reply,

    Dudes. Seriously? (more…)