McGraw-Hill Sells Education Business for $2.5 Billion
Company will rename as McGraw Hill Financial.
McGraw-Hill has agreed to sell its education business to investment company Apollo Global Management for $2.5 billion. This leaves the company with its remaining McGraw-Hill Financial operation and after the close of the deal, which is expected later this year or early 2013, it will become the company's official name.
McGraw-Hill split in September 2011 into two companiesâ€”McGraw-Hill Financial and McGraw-Hill Educationâ€”in an effort to reduce its cost structure and unlock new value.
The Financial group, headed by Terry McGraw, includes the publishing assets under the Aviation and Construction groupsâ€”as well as the Standard & Poor's and J.D. Power and Associates brands.
Of the two companies, Financial is the larger, with 2011 revenues of about $4.1 billion. Of that, the Commodities & Commercial segment, which includes the J.D. Power, Construction, and Aviation Week groups, made about $900 million in 2011 revenues. McGraw-Hill Education ended 2011 with revenues of $2.3 billion.
Estimated 2012 revenues for McGraw Hill Financial are $4.4 billion.
"Today's transaction marks a transformative time for our company, shareholders, customers and employees," says McGraw inÂ statement. "This move builds on McGraw-Hill's strong legacy and gives us an unprecedented opportunity to focus on accelerating the growth of our iconic brands and leading franchises such as Standard & Poor's, S&P Dow Jones Indices, S&P Capital IQ, Platts and J.D. Power and Associates.
Estimated net proceeds of $1.9 billion from the sale will be used to pay off short-term debt, make tuck-in acquisitions and sustain the company's share repurchase program.Â