Houghton Mifflin To Buy Harcourt for $4B
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Houghton Mifflin Riverdeep Group Plc, the book and software publisher, agreed to buy Harcourt Education from Reed Elsevier Plc for $4 billion to expand sales to American schools.
The company will pay $3.7 billion in cash and $300 million in shares, Houghton Mifflin Riverdeep and London-based Reed Elsevier said in a statement yesterday.
The acquisition will help closely held Houghton Mifflin Riverdeep gain share in the $4 billion American market for education materials. Riverdeep Holdings Plc, controlled by former Credit Suisse Group banker Barry O’Callaghan, paid $1.75 billion for American textbook publisher Houghton Mifflin Co. in November.
“Riverdeep has been all over these assets since Reed announced they were for sale,” an analyst at Panmure Gordon in London, Alex DeGroote, said. “Both companies are big players in the U.S. education market, so therearepotentiallyquitebigcost savings to be made.”
Assets of Harcourt and Bostonbased Houghton Mifflin complement those of Riverdeep, which sells software under brand names such as Kid Pix, Reader Rabbit, Mavis Beacon Teaches Typing, and Oregon Trail.
Mr. O’Callaghan said in November that he planned to combine the sales forces of the companies to reduce costs.
