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.
Frequently Asked Questions
This 8-K filing announces a material definitive agreement entered into by The McGraw-Hill Companies, Inc. (now S&P Global Inc.) to sell its Education Business to MHE Acquisition, LLC for $2.5 billion.
The purchase price is composed of $2.25 billion in cash and $250 million in senior unsecured notes issued by the purchaser, MHE Acquisition, LLC, to the seller. The seller expects to receive approximately $1.9 billion net of taxes and closing adjustments.
The transaction is subject to customary closing conditions, including the expiration of the HSR waiting period and the receipt of necessary regulatory approvals in certain foreign jurisdictions. Both parties' obligations are also contingent on the accuracy of representations and warranties and compliance with covenants, with a condition for the purchaser that there is no material adverse change affecting the Education Group.
A trademark coexistence agreement will be entered into. The purchaser will have exclusive rights to use certain McGraw-Hill Education marks within the education field of use, while The McGraw-Hill Companies, Inc. will retain exclusive rights to use these marks in all other fields.