McGraw-Hill sells its education business
Update: In an earlier version of this story, we erroneously reported that McGraw-Hill’s education business was being purchased by Apollo Global, which owns the for-profit University of Phoenix. McGraw-Hill’s education business is actually being purchased by Apollo Global Management, an unrelated firm. We regret the error.
In a surprise $2.5 billion cash and debt deal expected to be final by the early part of 2013, a private equity firm will purchase McGraw-Hill Education’s digital and traditional textbook business.
After Apollo Global Management completes the deal, McGraw-Hill will be renamed McGraw Hill Financial and will focus solely on its major brands such as J.D. Power and Associates, Standard & Poor’s, and S&P Capital IQ. McGraw-Hill representatives say the company is confident that this refocus will prove profitable for the company’s shareholders.
The move could significantly affect the higher-education market, analysts said.
“I think the acquisition holds promise for the key trends that we see,” said Eric Bassett, vice president and practice leader at Eduventures, an advisory services company for the higher-ed community. “The future of higher ed and educational content generally is about the mix of technology and content. The company that was McGraw-Hill is going to need capital to continue to invest in technology to complement its content.”
Bassett feels confident that Apollo’s acquisition of McGraw-Hill Education will prove successful for both parties.