Apollo Global Sells McGraw Hill To Investment Firm For $4.5B

The global investment firm Platinum Equity has acquired educational publishing company McGraw Hill from funds managed by affiliates of Apollo Global Management, Inc. APO for approximately $4.5 billion.

McGraw Hill Deal Notes: McGraw Hill was founded in 1888, and its text books, digital learning tools and platforms are found in more than 100 countries.

Apollo purchased the education unit of McGraw Hill Companies in 2012 for roughly $2.5 billion and retained the McGraw Hill name, while the remaining parent company rebranded as McGraw Hill Financial Inc. and later as S&P Global Inc.

According to Apollo, McGraw Hill generates more than $1 billion a year in revenue from digital products, and the percentage of revenue from this sector of its operations has grown from less than 25% in 2013 to more than 60% today — with more than 80% in its Higher Education business.

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Why Platinum Equity Made The Deal: Platinum Equity founder and CEO Tom Gores cited McGraw Hill’s digital offerings during the coronavirus pandemic as being a main selling point for the transaction.

“The pandemic has been especially disruptive to education, and investing in innovative solutions, and digital learning tools in particular, is more important than ever,” he said in a statement. “We are excited about the opportunity to put our operational and financial resources to work on behalf of students and teachers everywhere.”

McGraw Hill CEO Simon Allen and his senior leadership team will continue to lead the business under its new owners.

“Working with Apollo, we have transformed our business,” Allen said. “Now, with Platinum's resources and expertise, we will be positioned to accelerate our digital growth and to continue to lead the way as a trusted education partner during a dynamic time for the industry.”

APO Price Action: At last check, Apollo’s shares were trading at $58.49, up 0.83%.

(Photo courtesy McGraw Hill.)