Education publishing and technology company Houghton Mifflin Harcourt, will be bought by private investment company Veritas Capital for $2.8 billion, in a February 22 deal said to allow the education company to expand its offerings to more schools.
As noted in the agreement, Houghton Mifflin Harcourt shareholders will receive $21 cash per share via a tender offer. This represents a 36% premium of Houghton Mifflin Harcourt’s share price as of January 13, 2022, for a total value of $2.8 billion.
“Partnering with Veritas will provide HMH with the opportunity to accelerate our momentum and increase our impact on the four million teachers and 50 million students that we support each day,” Jack Lynch, President and Chief Executive Officer of HMH, said in a press release. “As the promise of digital learning increasingly takes hold across the nation, we are confident this transaction will deepen our ability to bring the power of learning to even more teachers and their students, invest in our purpose-driven team, and have a positive impact on the communities we serve.”
“We recognize HMH as one of the storied brands in education and are excited to partner with the company to expand its market-leading digital solutions and deliver the most efficacious products to students and teachers,” Ramzi Musallam, Chief Executive Officer and Managing Partner of Veritas, said in a statement. “We look forward to bringing to bear our deep experience in K-12 education and proven track record to meaningfully invest in the Company to help drive better outcomes for students across the nation.”
After closing, Houghton Mifflin Harcourt President and CEO, Jack Lynch, will continue to lead the company along with the existing management team.
The reverse triangular merger is expected to close in Q2 2022, subject to regulatory approval and customary closing conditions. It has already been approved by Houghton Mifflin Harcourt’s Board of Directors.
According to the filing, “Bank of America, JPMorgan Chase Bank, N.A., Deutsche Bank and Macquarie Capital are providing committed financing for the proposed transaction.”
Houghton Mifflin Harcourt is represented by Wilmer Cutler Pickering Hale and Dorr LLP and its financial advisor is Evercore Group L.L.C. Veritas Capital is represented by Milbank LLP.
Houghton Mifflin Harcourt’s (Nasdaq: HMHC) shares were valued at $18.12 on February 18; on February 22, when the deal was announced, the stock closed at $20.90. As of the time of this writing on March 1, the shares are at $20.96.
