Apollo to buy McGraw-Hill education unit for $2.5 bn
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McGraw-Hill Companies Inc said it will sell its educational publishing unit to Apollo Global Management for $2.5 billion.
McGraw-Hill expects to record a non-cash impairment charge of about $450 to $550 million in the fourth quarter.
McGraw-Hill said it will realize $1.9 billion of proceeds from the deal, after taxes and certain adjustments, and will use the money to buy back its shares, make 'selective tuck-in acquisitions' for its portfolio of financial services businesses and repay short-term loans.
McGraw-Hill owns Standard & Poor's credit rating service, Capital IQ tools for financial analysis and commodity market information services company Platts.
The company announced in September 2011 that it would separate the education and financial services businesses as part of a stepped-up push to increase returns to shareholders. The restructuring plan was announced after institutional investors argued publicly that the firm would be worth more if split up.
Like other publishers, the education business has been under pressure to adapt its content to digital delivery. McGraw-Hill originally discussed spinning off ownership of the education business to its shareholders.