Scholastic Corp to sell EdTech business to Houghton Mifflin Harcourt for $575 mn
25 Apr 2015
Scholastic Corporation, the world's largest publisher and distributor of children's books, yesterday struck a deal to sell its Educational Technology and Services (EdTech) business to Houghton Mifflin Harcourt Company (HMH) for $575 million in cash.
EdTech had an operating income of $40 million on revenues of $249 million last year, while in the nine months of the current fiscal year ending 31 May 2015 it generated n operating income of $17 million on revenues of $175 million.
Scholastic, based in New York, expects around $360 - $370 million net proceeds from the sale, after taxes, transaction fees, and other expenses.
The company plans to re-invest the proceeds from the sale in its children's book publishing and distribution, classroom and supplemental materials publishing, and international business segments.
Scholastic said that the sale will enable it to focus on its core businesses of children's book publishing and distribution.
Richard Robinson, chairman, president and CEO of Scholastic, said, ''Scholastic has built a global business around the guiding principle of promoting school-based reading and learning. This is an exciting time for our businesses with a renewed focus on books and reading in schools and at home. We now have a historic opportunity to further grow our children's book publishing and distribution, classroom and supplemental materials publishing, and international businesses.''
Scholastic is the world's largest publisher and distributor of children's books and a leader in educational technology and related services and children's media. The company distributes its products and services worldwide through a variety of channels, including school-based book clubs and book fairs, retail stores, schools, libraries, on-air, and online.
It also holds the exclusive US publishing rights to Harry Potter and The Hunger Games book series.
HMH is an educational and trade publisher in the US. It publishes textbooks, instructional technology materials, assessments, reference works, and fiction and non-fiction for both young readers and adults.
The Boston-based company provides interactive, results-driven education solutions to more than 50 million students in more than 150 countries.
It also publishes renowned and awarded novels, non-fiction, children's books and reference works for readers throughout the world. Its authors' list ranges from Ralph Waldo Emerson to Jonathan Safran Foer, and titles from Curious George to The Lord of the Rings, and includes eight Nobel Prize winners, 48 Pulitzer Prize winners, 13 National Book Award winners, and more than 100 Caldecott, Newbery, Printz and Sibert Medal and Honor recipients.
