The New York Times rightfully wonders just who on earth is this Barry O'Callaghan guy and why he's not only bought up Houghton Mifflin but now Harcourt Education, thereby turning a small Irish software company into a giant American textbook publisher. Until last year, writes Eric Pfanner, Riverdeep was a relatively small software company, best known for educational programs like Reader Rabbit. If the Harcourt acquisition is completed, the company would vault past McGraw-Hill and Pearson to become the biggest textbook publisher in the United States.

So how did that happen, especially as Wolters Kluwer, Pearson and Reed have been involved in high-profile acquisitions and sales of their own? Analysts say private equity has been attracted to the educational business by steady cash flows, a relative lack of competition and expectations that spending will increase in the coming years as states like California step up textbook replacement programs - but big companies are anxious to sell because educational publishing has lagged behind areas like medical, legal and scientific publishing in the shift to digital distribution.

In comes a company like Riverdeep, where O'Callaghan sees an opportunity to bring into the future an industry long dominated by a handful of big players. "The idea of marrying content with technology holds strategic appeal," said Drew Crum, an analyst at Stifel Nicolaus in Cleveland. But as the Sunday Business Post reports on what may prove to be the merger's biggest stumbling block: although valued at $11 billion, the enlarged company has debts of $7.4 billion, according to analysts, and company president Jeremy Dickens admitted there would be an annual interest bill of $400 million. Hence the 11.8 percent stake in HM Riverdeep by Reed to inject some degree of stability. The question is, how far and how long?