McGraw Hill to Be Acquired by Private Equity Firm for $4.5 Billion
The education and publishing giant McGraw Hill will be acquired by a private equity firm that has a deep stake in a diverse array of industries, in a deal valued around $4.5 billion.
Platinum Equity, a California-based firm headed by billionaire Tom Gores, has agreed to buy McGraw Hill from Apollo Global Management Inc., the two companies announced Wednesday.
The deal is set to be completed this summer, pending regulatory approval. Terms were not disclosed in a joint statement issued by Platinum Equity and Apollo.
It marks the second time since 2019 that Apollo has reached a deal to sell McGraw Hill. A proposed megamerger between McGraw Hill and Cengage, two of the largest education publishers, was called off last year because of regulatory scrutiny from the U.S. Department of Justice.
Apollo bought McGraw Hill in 2013 for $2.4 billion.
If the latest acquisition is approved by regulators, McGraw Hill will continue to be led by CEO Simon Allen and his leadership team. Allen said in a statement he is looking forward to working with Platinum to accelerate McGraw Hill’s digital growth.
“Working with Apollo, we have transformed our business,” Allen said. “Now, with Platinum’s resources and expertise, we will be positioned to accelerate our digital growth and to continue to lead the way as a trusted education partner during a dynamic time for the industry.”
One of the biggest companies in education, McGraw Hill Education has in recent years become more focused on digital education products, seeking to recast its mission as a “learning science company” capable of delivering resources customized to the needs of individual students. It offers a wide variety of curriculum and academic resources across K-12, and it is the producer of ALEKS, an online tutoring and assessment program.
Since Apollo acquired McGraw Hill, the company’s digital portfolio has grown from less than a quarter of its total revenue to over 60 percent now. And McGraw Hill has completed six digital-focused acquisitions since 2013.
McGraw Hill would become the first education company in Platinum Equity’s portfolio. The private equity firm’s portfolio includes about 40 diverse companies, ranging from a provider of wind turbines to a marine contractor that specializes in cruise ship interiors to a company that specializes in frozen seafood products to the NBA’s Detroit Pistons franchise.
Platinum Equity said McGraw Hill is well positioned for its next phase of growth.
“The pandemic has been especially disruptive to education, and investing in innovative solutions, and digital learning tools in particular, is more important than ever,” said Gores, the founder of Platinum Equity. “We are excited about the opportunity to put our operational and financial resources to work on behalf of students and teachers everywhere.”