Cengage Buys Houghton Mifflin's College Unit
Cengage Learning completed its $750 million deal to acquire the college division assets of Houghton Mifflin.
June 9, 2008
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According to a statement, the acquisition will increase the company's exposure to the college classroom by bolstering the range of textbooks, study guides and custom publications available to professors and students. The assets will be integrated into Cengage's academic and professional arm.
Last Wednesday, the Justice Department ruled that in order to complete the deal Cengage would have to divest assets related to textbooks and educational materials, including "all tangible and non-tangible assets" related to finished textbooks, publishing and licensing rights, author contracts and original artwork.
The Stamford, Conn.-based Cengage is the second largest publisher of college textbooks in the U.S. According to the Justice Department complaint, the company had total revenues of $1.7 billion in the 12 months ending September 20 2007, $1 billion of which came from sales of college textbooks and ancillary materials. The acquired Houghton Mifflin assets, meanwhile, had an estimated $230 million in revenues last year.
Apax Partners and OMERS Capital Partners acquired Thomson Learning in July of last year, just ahead of the credit crunch that has nearly wiped out massive leveraged buyouts.
Since the $7.75 billion deal, Cengage has made a few tuck-in acquisitions. In the same month, the company bought TrueOutcomes LLC, a web-based provider of universal assessment tools, and this past May, Cengage's Delmar subsidiary acquired the assets of PAL publications.
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