Cengage Learning is a leading educational content, technology and services company for the higher education and K–12, professional and library markets worldwide. Cengage is based in Boston and San Francisco, though Cengage employs people in 40 countries with company sales in more than 125 countries around the world.

Cengage Learning is not ranked this year because results for fiscal year 2015 were released after the deadline.

Analysis & Key Developments


Adjusted revenues were 1.71 billion USD in 2015, down from 1.75 billion USD in 2014. The Domestic division contributes a majority of 1.42 billion USD, with 51% coming from the sale of digital products. The International unit earned the group 290 million USD.

Given the company’s transition from bankruptcy and restructuring, a projection from past years would not be accurate. However, the company has released results for the first three quarters of fiscal 2015 (nine months ended by December 31, 2014), showing revenues of $382.3 million in April through December 2014 (down 7.9% from $414 million in the same period in 2013), and adjusted EBITDA of $121.7 million (down 16.4% from 2013).

Cengage filed for Chapter 11 bankruptcy protection in July 2013 due to overwhelming debt of 5.8 billion USD. The company entered into a restructuring agreement that eliminated more than 4 billion USD. An additional 1.75 – 2 billion USD was settled with the creditors in exchange for a majority of the reorganized company’s equity. Cengage emerged from Chapter 11 in April 2014 with remaining debts that were slightly lower than the company's annual sales of approximately 2 billion USD.

The debts were the legacy of the 2007 buyout by Apax and Omers Capital Partners of the former Thomson Learning from Thomson Corp of Canada. Apax purchased roughly 800 million USD of the company's debt to ensure a role in the negotiations along with rival Apollo Global Management, which also bought McGraw-Hill.

Ownership, mergers & acquisition, internal organization

As Cengage completed its restructuring, CEO Michael Hansen announced that the company’s headquarters would be relocated to Boston. Previously, only the management team was slated to move. “We are developing Boston as a high-tech center for us,” Hansen said. “We've found the Boston market very good — not necessarily cheap — but a very good place to attract technology talent.”


According to a spokesperson, Cengage will continue to maintain operations in more than 20 countries around the world and many locations in the U.S.

Earlier Developments


While Cengage Learning saw both revenues and earnings rising, the company is still struggeling with debts amounting to 5.7 billion USD for year ending June 30, 2012, when the domestic segment generated approximately 86.2% and 95.9%, respectively, of total revenues and adjusted EBITDA.

Cengage Learning reported an operating loss of 2.77 billion USD for the three months ending March 31st 2012, compared to a loss of 12.3 million USD the previous year. Sales rose 4.8% to 353.4 million USD.

Ownership, mergers & acquisition, internal organization

Both Ron Dunn and David Shaffer announced they would step down from their current positions in July 2012. Dunn, who served as CEO since 2007, became Chairman to make way for a younger chief officer. David Shaffer retired as company chairman on September 30, 2012. Julian Drinkall was appointed President and CEO of Cengage EMEA and India business, replacing Jill Jones.

Cengage was faced with approximately 5.7 billion USD in debt with 500 million USD annual interest. Following Dunn’s departure, the company announced they would appeal to investors with a debt maturity extension program. However, in May 2013, new CEO Michael Hansen (as of September 2012) discussed restructuring options with analysts including a possible voluntary Chapter 11 bankruptcy filing, since the company may not have enough liquidity to repay. Cengage Learning had already appointed restructuring advisers to repay parts of its 5.3 billion USD gross debt load. Cengage was bought by Apax in 2007 for 7.75 billion USD, and a private equity owner “bought up more than 800 million USD of debt in the struggling publisher, potentially setting the stage for an effort to keep control of the company even if Cengage files for bankruptcy”, according to the Wall Street Journal. Analysts assumed that Apax could be interested in merging Cengage with the former education unit of McGraw Hill that was bought by Apollo, which also holds Cengage debt.


For fiscal year 2012, the international segment generated approximately 13.8% and 6.1%, respectively, of total revenues and adjusted EBITDA.

As a foreign educational publisher, Cengage developed a strong position within the Chinese ELT market. Cengage Lerarning operates in Asia/Pacific, EMEA (Europe, Middle East and Africa), and Latin America, with physical locations in Asia (based in Singapore), EMEA (based in Andover, England), Australia (based in Melbourne), and Latin America (based in Mexico City).


For fiscal year 2012, total domestic digital product sales comprised approximately 37.5% of total domestic revenue compared with 31.9% for fiscal year 2011, with digital product sales during fiscal year 2012 for key digital products in the core two- and four-year college and career markets increasing by over 52.0% compared to the prior year.

In the research market, Cengage digitized substantially all of its reference content and derives approximately 70% of revenue in the research market from digital products.

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