The Sunday Business Post reports that Riverdeep, the educational publishing firm headed by Barry O'Callaghan, is close to completing a deal to buy Houghton Mifflin for approximately $3.5 billion. The reverse takeover of Houghton Mifflin by Riverdeep, which had sales of about $330 million last year, is expected to be finalized within three weeks. The deal will create a company with an enterprise value of about $4.5 billion, or three times its annual sales.

The deal will be funded by a combination of equity and debt and is likely to be supported by Credit Suisse First Boston, O'Callaghan's former employer. |It will be highly leveraged, but it looks like a good deal," said one informed source.