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Posts Tagged ‘McGraw-Hill’

Reed Business Information Dumps Some Suitors, Keeps Others

reed-business-logo.gifOver the weekend, paidContent.org’s Rafat Ali reported that the second round of bidding for the assets of Reed Business Information (including Publishers Weekly) had begun—with McGraw-Hill cited as one of the leading contenders and Nielsen emerging as a less clear candidate for the role of buyer.

Now that would be a interesting turn of events, because it would place the PW, Library Journal and Kirkus brands in the same basket—and, though it’s not as immediately relevant to us in the book world, Variety and The Hollywood Reporter. That said, it should be noted that two weeks ago, former NY Times film industry correspondent Sharon Waxman blogged that she had been told Nielsen might seek to unload its own business media division, which would probably put them out of the running for buying Reed Elsevier’s. McGraw-Hill, on the other hand, would conceivably be interested in absorbing RBI’s expansive portfolio of construction industry-directed media to augment its own offerings in that field, with the brands serving the publishing industry representing new territory that—and I’m just speculating wildly here—could fit under the BusinessWeek umbrella.

Whoever acquires RBI, though, it’s highly likely that the new owners may want to strip the main brands of all the baggage they’ve accumulated over the years and rebuild—merging the legacy identities with a new sense of best practices in serving industry-specific markets.

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Riverdeep, Mergers High

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?

Reed Elsevier, Pearson Shares Fall

Marketwatch reports that Reed Elsevier was a top decliner Tuesday, down 2.8% while Pearson shares declined 0.4%. Shares in Reed Elsevier declined as analysts noted that the positions held by both companies in the U.S. educational publishing market mean the deal will be investigated by regulatory authorities, and may not close until the first half of next year.

“The market shares of Reed/Harcourt and Houghton Mifflin Riverdeep are approximately 20% and 15% and, accordingly, the transaction will be investigated,” said analysts at Numis Securities. Analysts at Bear Stearns noted: “Riverdeep has suddenly become the No. 1 U.S. schools publisher with a market share of approximately 33%, overtaking Pearson at 37% and McGraw Hill at 22%.”

Murdoch Speaks Out About Regan Firing

The New York Daily News’ Paul Colford reports on yesterday’s comments by NewsCorp chair Rupert Murdoch about why Judith Regan simply had to be let go. “She wasn’t for us,” he said, “She turned out not a team player, and that’s putting it mildly.” Interviewed at “Media Summit New York,” held at McGraw-Hill‘s headquarters, Murdoch recalled that he signed off on Regan’s OJ Simpson project, as long as payment would go only to the ex-jock’s kids. “I said [to Regan], ‘If it really reads like a confession, he gets no money,’” Murdoch said. “It’s my fault. I should have been closer to it.”

That’s because he “lost touch” with the project and learned about the public outcry at his ranch in Australia. But since he greenlit the project, that wasn’t why he okayed Regan’s firing: it was the Mickey Mantle book, which Murdoch called a “pseudo, pornographic thing.” Said Murdoch, “I thought, oh God, we don’t want to go through this again. Just cancel that book.” Others can, and will, point out the irony of Murdoch – a longtime peddler in tabloid news – calling Peter Golenblock‘s fictional memoir akin to pornography, but at least now there are on-the-record comments from the head guy…