The McGraw-Hill Companies
MHP today announced it has signed a definitive
agreement to sell its McGraw-Hill Education business to investment funds
affiliated with Apollo Global Management, LLC APO (collectively with
its subsidiaries, "Apollo"), for a purchase price of $2.5 billion, subject to
certain closing adjustments. As part of this transaction, McGraw-Hill will
receive $250 million in senior unsecured notes issued by the purchaser at an
annual interest rate of 8.5%. The transaction, which is expected to close in
late 2012 or early 2013, is subject to regulatory approval and customary
closing conditions.
Upon closing, McGraw-Hill, which will be renamed McGraw Hill Financial
(subject to shareholder approval), will be a high-growth, high-margin
benchmarks, content and analytics company in the global capital and
commodities markets. With customers in more than 150 countries, McGraw Hill
Financial expects 2012 revenue of approximately $4.4 billion with nearly 40%
from international markets. The Company will provide 2013 financial guidance
for McGraw Hill Financial when it announces its 2012 fourth quarter and
year-end financial results.
Beginning in the fourth quarter of 2012, the Company will classify and report
results of McGraw-Hill Education as discontinued operations. As a result of
this transaction, the Company anticipates a non-cash impairment charge in the
fourth quarter of approximately $450 to $550 million relating to the School
Education Group.
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