Summary
This 8-K filing from The McGraw-Hill Companies, Inc. (now S&P Global Inc.) on March 5, 2013, announces a significant amendment to a previously agreed-upon Purchase and Sale Agreement. The amendment modifies the terms of the sale of its McGraw-Hill Education business to MHE Acquisition, LLC, an entity controlled by Apollo Global Management. Investors should note the change in the composition of the sale proceeds, which will now be entirely in cash, impacting the total transaction value and seller financing received by McGraw-Hill. The key change involves the reduction in cash received at closing and the elimination of seller financing. Specifically, the cash component at closing is reduced to $150 million from an initial expectation of $250 million in unsecured notes. This adjustment brings the total cash purchase price down to $2.4 billion from the original $2.5 billion. While the deal still represents a substantial divestiture, these modifications to the payment structure warrant investor attention regarding the immediate cash inflow and the overall financial implications of the transaction.
Key Highlights
- 1Amendment to the Purchase and Sale Agreement for the sale of McGraw-Hill Education business.
- 2The sale is to MHE Acquisition, LLC, an entity wholly-owned by investment funds managed by Apollo Global Management.
- 3The total purchase price has been adjusted to $2.4 billion in cash.
- 4At closing, the Company will receive $150 million in cash.
- 5This replaces $250 million in face amount of unsecured notes previously agreed upon.
- 6The seller financing component of the original agreement has been eliminated.