Harcourt Bought by Houghton Mifflin
It’s official: Just hours after the Financial Times reported that a deal was imminent, Barry O’Callaghan‘s Riverdeep Houghton Mifflin Group has bought Harcourt‘s US Schools Education business from Reed Exhibitions for $4 billion ($3.7 billion payable in cash and an equity stake of $300 million, which will leave Reed with an 11.8 percent stake in the parent company). “When Reed Elsevier announced its intention to sell the Harcourt businesses, we were thrilled to have the opportunity to combine these businesses,” said O’ Callaghan in the announcement. “The addition of the Harcourt businesses to Houghton Mifflin will strengthen our position in the highly competitive educational publishing business. Together, Houghton Mifflin and Harcourt will provide a more customized, diverse and innovative range of products to meet the changing needs of educators and students.”
The combined businesses will be led by Tony Lucki, former head of Harcourt Education. And even though one must agree with Michael Cader‘s assessment in Publishers Lunch earlier today that “the trade divisions would stand as a sideshow to the expected combination of Houghton and Harcourt’s educational lines,” it will be very interesting to watch how Harcourt and HM trade imprints – with combined sales of $200 million – are combined, and who will get to stay put. Remember, too, that Riverdeep only just bought Houghton Mifflin at the beginning of the year for a $5 billion price tag – a debt that O’Callaghan is still struggling with. Is there enough financial solvency to go around? Time will only tell…
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