Publishing Giant Reed Elsevier Buys U.S. Educational Publisher Harcourt General for $5.65 Billion
In a move that instantly makes it a force on the U.S. educational publishing scene, Anglo-Dutch publishing company Reed Elsevier, owners of the Rigby line of K-3 literary products, has agreed to buy Massachusetts-based Harcourt General for $5.65 billion. The move marks the largest acquisition in educational publishing history, outpacing by more than $1 billion Pearson's $4 billion-plus purchase of the educational properties of Simon & Schuster several years ago.
Harcourt, which put itself in play in June when it hired the investment banking firm Goldman Sachs & Co. to explore the company's options, is widely considered one of the four leading educational publishers in the U.S. with McGraw-Hill, Pearson Education and Houghton Mifflin. Harcourt boasts such K-12 imprints as Harcourt School Publishers, Holt Rinehart and Winston and Steck-Vaughn, and with its higher education, professional and training divisions generates annual revenues in excess of $2.3 billion.
Despite its strength, the deal was made in part because Harcourt was realizing that competing in the low-margin, high-competition world of educational publishing was becoming increasingly difficult. …