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Tag: McGraw-Hill Education

  • Parent Company of University of Phoenix Could Be Sold to Owner of McGraw-Hill Education

    Apollo Education Group, parent company of the University of Phoenix as well as Apollo Global, is in “advanced talks” to be purchased by Apollo Global Management, owner of McGraw-Hill Education and of Cengage debt. Got that?

    To clarify, the Apollo Education Group is the parent company of the University of Phoenix, and they have a subsidiary called Apollo Global, which is a joint venture with the Carlyle Group, another private equity firm. While the confusion is understandable, Apollo Global Management previously shared nothing in common with the Apollo Education Group other than their admiration for the choir-directing sun-god.

    With that in mind, here is the news from the Wall Street Journal today:

    A deal between Phoenix-based Apollo Education and Apollo Global Management, a New York private-equity firm, could be worth about $1 billion, some of the people said, with one of them adding an agreement could be reached in the next few weeks. Apollo Education had been in discussions with a number of private-equity firms since late last year, but Apollo Global Management is the only one still in the running now, this person said.

    It is possible, as always, in such situations that there will be no deal, and another buyout firm could re-emerge.

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  • McGraw Hill’s New Personalized Learning Authoring Product

    In what has to be the softest launch ever, McGraw Hill has been quietly talking about their new personalized learning authoring system. If you ask them when it will be available to all customers, they will tell you “right now.” But since it doesn’t even have a name yet, I’m not sure how customers would ask for it. They occasionally refer to it as their “learning science platform,” but that’s not really its name.

    Here’s a dirty little secret: The “new” authoring platform is essentially a publishing front end for their SmartBooks platform. Not only is it interesting in and of itself; it also gives us some indication of one direction that the textbook publishing industry could go. (By the way, they don’t like to be called “textbook publishers” anymore. I guess the industry needs to come up with a new name for that too.)

    I was able to get a quick overview of the platform from McGraw Hill’s Chief Digital Officer Stephen Laster and SVP Zach Posner.

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  • GSV 2015 Review

    The basic underlying theme of the 2015 GSV Ed Innovation conference is “more is more.” There were more people, more presentations, more deal-making, more celebrities…more of everything, really. If you previously thought that the conference and the deal-making behind it was awesome, you would probably find this year to be awesomer. If you thought it was gross, you would probably think this year was grosser. Overall, it has gotten so big that there is just too much to wrap your head around. I really don’t know how to summarize the conference.

    But I can give some observations and impressions.

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  • 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].

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