Houghton Mifflin, NWEA CEOs Break Down New Acquisition, Future of K-12 Assessments
Following the announcement that two major education companies — Houghton Mifflin Harcourt and NWEA — will merge, both CEOs are sharing why they think combining curriculum and interim assessment makes sense for the current education market.
As part of HMH’s acquisition of NWEA, which is expected to close in 90 days, the assessment provider will operate as a division of HMH and continue to provide its interim and state assessments, while also integrating within the curriculum company’s resources.
It’s a deal that could impact the millions of students each company serves.
EdWeek Market Brief sat down with HMH CEO Jack Lynch and NWEA CEO Chris Minnich after the announcement to learn more about how the deal came together, what their products and services will look like moving forward, and what they see as the future of assessment.
Both of you have been involved in your fair share of mergers and acquisitions. What separates this deal in terms of importance?
Lynch: What’s incredibly important about this particular deal in K-12, is we have two lead organizations — one with incredible expertise in interim assessment, the other with incredible expertise in curriculum — and bringing them together is really diversifying in a way that will create a lot of value for teachers.
Being able to measure their [students’] progress along the way, we believe, is really game-changing for teachers. For us, this is really an uncommon combination of two companies, and done in a very complementary way.
Minnich: We’ve seen assessment change over the last few years. It’s much more tied to what’s next for students, and I think that’s a better shift for us around assessment.
It’s not enough to just say, ‘Okay, well here’s where your kid is.’ We are the best at giving data back to people. Now we want to be the best at saying, ‘This data is important, and you already knew that, and you can connect it to what’s next for you.’
One of the most important things for us is to answer the question about what’s next out of the assessment, and this enables us to do that better.
This announcement yesterday raised some questions about what your products will look like moving forward. So will this mean that districts will need to buy your products as a package?
Minnich: The answer to that is, no. We’re confident that we are going to operate in a way that is connected, but also we will be a division of HMH, and that’s an important part of this. We will still be NWEA.
I think both HMH and us believe that some of the really good things about NWEA should continue on, that you should be able to just purchase the MAP assessment, for example, if you want to. And that’s something we care deeply about.
What’s important to us is that NWEA, its brand, remains in the market.Jack Lynch, president and CEO, HMH
Now, if you’re looking for something more, or if you’re already using HMH products, we think we should make that easier for you. We’re hoping to add something so that there are options — but again, those are options.
Lynch: What’s important to us is that NWEA, its brand, remains in the market. Consistency for school districts, especially school districts that want one assessment instrument to measure student academic progress across an entire school district regardless of the curriculum used — that’s really important to NWEA customers. It’s really important to Chris and myself to ensure that happens.
In addition, there will be a connection that will mate [NWEA] and HMH curricular solutions. At this point in time, it’s really too premature to say what is the business for that, who will sell it. But I think the good news is that for consistency purposes we’ll continue with NWEA as it exists today. And then there will be an integrated option.
What is the size and the reach of NWEA at this point, in terms of students or school districts?
Minnich: We’re in over 10,000 school districts across the country, and that includes charter schools and some other things. We serve over 15 million kids.
We’re really proud to have grown to the size we are, but given the number of districts we serve, it comes with a great responsibility. And that’s why this is the the next step. We’re going to be able to provide better service to our school districts.
What do you mean when you say you’ll be able to provide better service to districts?
Minnich: I think our product can get better. [With this new deal] we will have more invested in our product that we could have in our current situation. And so there will be things around technology that will improve, there are things around the experience that our partners will have that will improve. But again, we’re in early discussions about that so I can’t be more specific for them.
Can you take us behind the scenes about how this came together. How long have you been considering something like this, or was was there a moment when you realized that it made sense?
Minnich: We started this conversation almost exactly a year ago, it was the first of the year 2022. We had a board-level conversation where … a couple things were obvious to us: We needed a bit more investment in our technology systems. We thought that being an assessment-only organization wasn’t going to serve us well as we go into the future.
We embarked on a process where we talked to several folks about what might be possible. About two months ago, we centered in on HMH and we began to have more detailed conversations about what that could mean.
[I’m] very excited about the foundation that’s being formed. One of the things that was really important to us is that we create resources for education as part of this process, and we’re going to be able to be successful in doing that.
(NWEA announced that the proceeds from the acquisition will be used to fund “the continuation of a not-for-profit focused on helping all children learn and achieve their full potential,” with plans to eventually convert it to a private foundation.)
What are the goals and structure of the foundation?
Minnich: The foundation was a really big part of the board’s calculus. They wanted to be able to invest back in education. So NWEA the nonprofit actually becomes this foundation on [the closing of the acquisition]. And that foundation will be renamed because the brand and the name is going to HMH. So there’ll be another education foundation that I hope will do something unique. And I have the opportunity to serve on the board of that foundation.
What made the prospect of a merger worth exploring for HMH?
Lynch: For me, the strategic logic of combining research-valid, reliable assessment to screen students and then place them and monitor their progress alongside curriculum that can help them gain said progress made all the sense in the world.
From the very beginning of my discussions with [Minnich], I think he could see that we had very deep conviction that this was the right thing to do, not only for HMH, but the right thing to do for the over 3 million teachers that we support. So it was, from the very start, something that made a lot of sense.
We thought that being an assessment-only organization wasn’t going to serve us well as we go into the future.Chris Minnich, CEO, NWEA
After the announcement yesterday, EdWeek Market Brief heard some concerns from those who follow the curriculum and assessment markets that a deal of this size could result in your companies having too much influence over district choices of instructional and testing resources. What’s your response to that?
Lynch: There was one person in the industry who commented that there are few assessment proposals out there compared to years past. Clearly, this is a complementary acquisition of an assessment company and a curriculum, so that concern isn’t really applicable because we don’t bid on assessment deals. It would be a concern if two assessment companies partnered — because then there would be one less choice.
The reality is, there’s actually greater value that is being created for educators as a result of the combination. I understand why there may be concern with consolidation in our industry, but it’s a very large industry. We happen to be the largest player in this industry, but we have nowhere near a leading share of the overall addressable market.
Minnich: I talked a little bit about how we’re going to continue to grow our influence in the proposals market. So that’s what we continue to be focused on, is not so much of how many [assessment organizations] are involved, but the quality of what’s coming out of the organizations that are still involved. And that’s where we’re going to up our game.
Another big question given current uncertainty around the economy is, do you expect any changes in your workforce, either layoffs or hiring?
Lynch: Anytime you have merger of two companies, you have some redundancy in roles and certainly we’re mindful of that. But I think for us, there’s just incredible expertise and talent in both organizations.
So we’re very focused right now on closing this deal and putting together the integration plan, and, really, first and foremost, seeing what we can do to unlock a lot of value for educators.
NWEA has recently gotten into state testing and currently has 10 state contracts. Will that continue to be a priority going forward?
Minnich: We’re really excited to continue to serve our state customers. And part of this was having a long conversation about how we would continue to do both district and state work.
I would anticipate [that work will] continue to grow. And I think we’ll continue to do it in our unique way. We have a different perspective on how a state assessment should be carried out than many in the industry. We want to use data from multiple sources to make state testing more efficient, and also to serve kids and parents better than it does right now. We’re working with all our states to do that, and we anticipate continuing to do that.
More broadly, where do you see the future of assessment moving?
Lynch: From my perspective, assessment and instruction are two sides of the same coin.
Having progress-monitors work together with interim assessment, work together with summative assessment for forecasting purposes — that entire suite of summative, interim and formative can come to come together to create a very holistic picture of student academic achievement. And I think that’s what educators are looking for.
And so, if I were to talk about the end state of assessment, it is hand-in-hand with the resources necessary to advance student growth and academic performance instruments. But I think that it’s a very rich area for innovation.
So if if assessment continues to be something we do to students, that’s going to be challenging and it’s not going to be as good for kids. We have to show kids that there’s an extension out of all the assessments that we ask them to do. It shouldn’t be this punitive measure in which we just sit down and we never talked to kids about what happened in that assessment. So that’s what’s changing, in my mind.
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