The FT gives us another twist in the story of the giants and changing hands that dominate global education publishing. Eight months Riverdeep in a reverse takeover of Houghton Mifflin rose from a school software company into a $5bn educational publishing giant. Now is poised to complete on a $4bn (£1.97bn) bid for Reed Elservier’s remaining education assets.
HM Riverdeep will pay $3.7bn in cash and Reed will take $300m in stock for an 11.8 per cent equity stake. The sale comes after Pearson, bought Harcourt’s assessment and international education divisions for $950m in April, bringing gross proceeds to 20.8 times the division’s adjusted operating profit.
Private equity groups have been snapping up educational publishing assets, attracted by their strong and transparent cash flows. In May, Apax Partners and Omers Capital Partners paid $7.7bn to acquire Thomson Learning, while in March, Bridgepoint Capital paid £750m to take control of the education division of Wolters Kluwer, the Amsterdam-listed publishing group.
Education looks good for some and the stellar rise of Riverdeep shows that many believe that this sector promises much.
