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Posts Tagged ‘Sir Crispin Davis’

Reed Hopes For A Quick Dump of Riverdeep Stock

Reed Elsevier has signaled its intention to find a buyer for its 11.8 percent stake (valued at approximately $300 million) in Riverdeep, according to the Irish Independent. The stake forms part of Reed Elsevier’s recent deal to sell its Harcourt US schools education business to HM Riverdeep, which is headed by Barry O’Callaghan, for $4m.

It is understood that Reed agreed to take a stake in order to appease the debt backers of the HM Riverdeep deal, which will create a publishing giant with an enterprise value of about $10bn. Some $7.4bn of this will be comprised of debt. “We don’t take the view that’s a long-term shareholding,” Reed’s chief executive Sir Crispin Davis was quoted as saying yesterday, raising the spectre of the stock being sold soon after the deal is completed. Meanwhile, Sir Crispin said he was confident that HM Riverdeep had the financing in place to complete the transaction, expected to close in late 2007 or early 2008 after regulatory reviews have been completed.

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Reed Pondering Acquisition Options

After selling off Harcourt Education to Houghton Mifflin Riverdeep – in which it still has an 11.8% shareholder stake – Reed Elsevier said it would take another look at its balance sheet once the two Harcourt disposals complete, according to the Telegraph. One way is to sell off that minority share and borrow more money for further acquisitions. “We do recognise that when education completes we are in a new situation and we should look at this again,” said Reed CEO Sir Crispin Davis.

Houghton Mifflin Riverdeep is buying Reed’s US schools business for $4bn, while Pearson has agreed to buy the Harcourt assessment wing for $950m. Both deals should complete by the first half of 2008. Lorna Tilbian, an analyst at Numis Securities, said: “A strong case can be made that Reed is underleveraged and we believe there is scope for the group to increase its rolling share buyback”. The recent flurry leaves Reed focused on its science and medical education wings, which Davis is primarily happy about. “I have no ambition to go into any new sectors,” he said, adding he was particularly interested in acquisitions within online health and risk management, where “credit card fraud and employee screening are fast-growing areas”.

Reed Elsevier Quits Arms Exhibitions

Publishers Marketplace alluded to this in Sunday night’s email but the Times has more on the decision by BEA‘s parent company to extricate itself from the arms world after a sustained campaign from doctors, healthcare groups, authors and pacifist organizations. Reed Elsevier‘s biggest arms fair is the Defence Systems and Equipment International, which is held every two years at London’s Excel arena. The group will stage the next show in September but will quit the defense exhibitions sector by the second half of this year.

Sir Crispin Davis
, chief executive, said: “Our defence shows are quality businesses, which have performed well in recent years. Nonetheless, it has become increasingly clear that growing numbers of important customers and authors have very real concerns about our involvement in the defence exhibitions business. We have listened closely to these concerns and this has led us to conclude that the defence shows are no longer compatible with Reed Elsevier’s position as a leading publisher of scientific, medical, legal and business content.”

Reed To Sell Harcourt Education Arm

Continuing a theme of “anything is for sale,” Reed Elsevier, mirroring moves by major Dutch and U.S. rivals, said it would sell its education arm as it focuses on faster-growing markets such as legal, medical and scientific electronic publishing. Analyst estimates suggested the sale of Harcourt Education could fetch between 1.6 billion and 2.4 billion pounds ($3.2-$4.7 billion). The Telegraph reports that Sir Crispin Davis, chief executive of business publisher Reed Elsevier, expects strong interest from private equity bidders, and indeed, one such bidder – Irish entrepreneur Barry O’Callaghan, who as CEO of Riverdeep already bought out Houghton Mifflin earlier this year – has expressed interest, according to Forbes.

Alastair Osborne sees the larger theme of companies exiting the education business in droves, and comes up with some reasons, including the No Child Left Behind Act and students’ increasing reliance on web-based materials. Such companies, Osborne says, are left with a “stark choice: invest in technology and systems that power interaction between their content and the network (such as school planning, administration and assessment) or exit the business now while valuations remain attractive.