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McGraw-Hill Education hires underwriters for IPO -sources
September 1, 2015 / 10:32 PM / 2 years ago

McGraw-Hill Education hires underwriters for IPO -sources

Sept 1 (Reuters) - McGraw-Hill Education is pressing ahead with plans to go public and has hired underwriters to assist in an initial public offering valuing the company between $5 billion and $6 billion, including debt, according to people familiar with the matter.

The company’s owner, private equity firm Apollo Global Management LLC, has tapped Credit Suisse Group AG and Morgan Stanley to lead the offering.

Representatives of McGraw-Hill Education, Apollo, Credit Suisse and Morgan Stanley declined to comment.

McGraw-Hill Education expects to launch the IPO at the end of the year, following the end of back-to-school season, when it generates the bulk of its revenue through textbook sales, Reuters has previously reported.

New York-based McGraw-Hill Education is one of the largest educational publishers in the world, selling textbooks for school and university students and professionals in about 60 languages. It competes with Pearson Plc and Cengage Learning Inc, and, like its peers, has sought to make most of its content available on the Internet as more people read on their tablets and phones.

Apollo acquired the business from McGraw-Hill Companies in March 2013 for $2.4 billion. Since then, Apollo has increased the company’s profits, cut costs and expanded its digital offerings.

Last year, McGraw-Hill Education generated $321 million in earnings before interest, taxes, depreciation and amortization on revenue of $1.3 billion. Apollo has also had the company borrow to pay it hefty dividends, recouping its $1 billion equity investment. The company has $1.5 billion in debt as a result.

Shares of another educational publisher, Houghton Mifflin Harcourt Co, have performed well since it went public in November 2013 after emerging from bankruptcy. (Reporting by Liana B. Baker and Greg Roumeliotis; Editing by Steve Orlofsky)

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