Summary
S&P Global Inc. (then The McGraw-Hill Companies, Inc.) announced on November 26, 2012, a significant divestiture of its education business. The company entered into a Purchase and Sale Agreement to sell its "Education Group" to MHE Acquisition, LLC, an entity affiliated with Apollo Global Management, LLC, for a total transaction value of $2.5 billion. This sale represents a strategic shift for the company, focusing on its core data, analytics, and financial information services. The transaction is structured with $2.25 billion in cash and $250 million in senior unsecured notes issued by the purchaser, with an estimated net proceeds of approximately $1.9 billion after taxes and adjustments.
Key Highlights
- 1Agreement to sell the Education Business for $2.5 billion to MHE Acquisition, LLC (affiliate of Apollo Global Management).
- 2Transaction comprises $2.25 billion in cash and $250 million in senior unsecured notes from the purchaser.
- 3Estimated net proceeds for The McGraw-Hill Companies, Inc. are approximately $1.9 billion after tax and closing adjustments.
- 4The sale is subject to customary closing conditions, including regulatory approvals (e.g., HSR waiting period).
- 5The Seller Notes will bear interest at 8.5% initially, increasing to 11.0% after five years, with provisions for redemption and mandatory repurchase.
- 6A reverse termination fee of $125 million may be payable by the sellers under specific conditions related to financing.
- 7A trademark coexistence agreement will allow the purchaser exclusive rights to McGraw-Hill Education marks in the education field, while the seller retains rights in other fields.