McGraw-Hill Education is comprised of two divisions: The School Education Group (SEG), which provides education material for the elementary and high school; and the Higher Education, Professional and International Group (HPI), which serves the college, university, professional, international and adult education market. McGraw-Hill Education employs more than 6,000 people in 44 countries and publishes in more than 60 languages.
Key Company Developments in 2012 & 2013
Full year results for 2012 have not been released for McGraw-Hill Education, because of the sale to private equity firm Apollo Global Management, which was completed in March 2013. McGraw-Hill, listed as mother company for fiscal 2012 in this ranking, reported full year corporate revenues of 4.45 billion USD, noting that McGraw-Hill Education's results have been reclassified to reflect the business as a discontinued operation.
In 2011 the American textbook publisher reported revenue of 2.29 billion USD and operating income of 320 million USD. Challenged by flat school funding, sales for the first nine months of 2012 decreased 10% and earnings shrank 13%.
Ownership, Mergers & Acquisition, Internal Organization:
In November 2012, McGraw-Hill signed an agreement to sell McGraw-Hill Education to private equity firm Apollo Global Management, LLC. The sale was completed in March 2013 for a purchase price of 2.4 billion USD. Cengage Learning, Bain Capital, and Thomas H Lee Partners also bid for McGraw-Hill's education business. Recently, McGraw-Hill announced to receive an additional 150 million USD in cash upon closing instead of holding the notes as previously disclosed. The education unit will do business as McGraw-Hill Education Holdings. Apollo secured 800 million USD in financing, including a 560 million USD term loan and a 240 million USD revolving line of credit.
"It will enable the education company to continue developing digital learning systems for better outcomes for students and professionals around the world," reports Harold McGraw in his letter to shareholders.
With the completion of the purchase in March 2013, the education group will continue to be known as McGraw-Hill Education under the direction of Buzz Waterhouse.
In June 2012, McGraw-Hill announced Lloyd G. “Buzz” Waterhouse as President and Chief Executive Officer of McGraw-Hill Education.
Despite bad conditions in the kindergarten to high school market amid government funding declines, McGraw-Hill prepared McGraw-Hill Education for future success in a digital learning world. "We selected a strong new management team, including President and CEO Buzz Waterhouse, reduced expenses and continued developing cutting edge digital learning products."
In April 2013, Ron Schlosser has been appointed executive chairman of McGraw-Hill Education’s board of directors. Schlosser is a senior advisor to Apollo Global Management and held senior executive positions with a number of educational publishers including Haights Cross Communications, Thomson Learning Group (now Cengage Learning), Elsevier Science and MHE.
McGraw-Hill Higher Education entered the consumer market by offering LearnSmart, an adaptive learning technology, directly to students.