November 30, 2012
Let’s keep it simple in this posting.
On May 11, 2007 The Thomson Corporation announced that it had sold its Thomson Learning division to two private equity groups. The company was soon renamed Cengage Learning.
The last year that Thomson reported sales for Thomson Learning was fiscal year 2005.
Here’s the report:
Annual sales of $2.31 billion fetched a price of $7.75 billion (or inflation-adjusted sales of $2.51 billion fetched $8.4 billion).
Fast forward to November 26, 2012. McGraw-Hill issues a press release: “McGraw-Hill to Sell Education Business to Apollo for $2.5 Billion.”
What were McGraw-Hill Education’s sales last year?
Operating margin was 14%.
What a difference 5 years makes. McGraw-Hill Education, with similar sales and profits, commanded just under 30% of what Thomson Learning sold for 5 years ago.
Is there a crisis in educational publishing today?
December 2, 2012. A good analysis here, Phil Hill’s “Initial Thoughts on McGraw-Hill Education Acquisition.”
…based in part on a report in the New York Post: “Apollo’s plan is to repossess Cengage, combine it with McGraw-Hill Education and significantly cut costs…”