HM Riverdeep to Buy Harcourt Education for $4 Billion

By Jim Milliot -- Publishers Weekly, 7/17/2007 6:00:00 AM

The HM Riverdeep Group has agreed to acquire the U.S. business operations of Harcourt Education for $4 billion. The deal, which is expected to close later in early 2008, includes the Harcourt’s elementary school publishing businesses as well as Harcourt Trade. The price includes $3.7 billion in cash plus $300 million in an equity stake for Harcourt in HM Riverdeep. Total revenue of the properties involved in the sale was $1.11 billion in 2006 with the vast majority generated by the school and library operations. Sales of Harcourt Trade are estimated at about $60 million. Harcourt Education includes the pre-K–grade 6 publisher Harcourt School Publishers; Holt, Rinehart and Winston, publisher for grades 6–12; the supplementary publisher Harcourt Achieve; and the library reference publisher Greenwood-Heinemann.

The pending purchase of Harcourt Education is the first major acquisition made by HM Riverdeep since Riverdeep, based in Dublin, acquired Hougthon Mifflin late last year. The acquisition will make HM Riverdeep one of the largest educational publishing companies in the country. In the trade segment, the combination of Harcourt with HM will result in a trade unit with revenue of approximately $200 million, with particular strength in the children’s and literary fiction segments.

The deal with HM Riverdeep completes Reed’s exit from the education publishing market. In May, Reed sold Harcourt’s testing and international groups for $950 million to Pearson.