Apollo Is Weighing $6 Billion Sale of McGraw-Hill Education

Private equity firm Apollo Global Management Inc. is exploring a sale of textbook publisher and education technology company McGraw-Hill Education that could fetch up to $6 billion, including debt, according to people familiar with the matter.

The business could attract interest from other private equity firms, said the people, who asked not to be identified because the matter is private. The company could also explore a listing via a special purpose acquisition company, they added.

McGraw-Hill Education generates about $450 million in annual earnings before interest, taxes, depreciation and amortization, the people said. About $300 million of that is from digital sources, after the company has expanded in recent years in electronic textbooks and virtual learning, they said.

The business could fetch between $5 billion and $6 billion enterprise value if the sale goes ahead, the people said.

McGraw-Hill Education is working with financial advisers Macquarie Group Ltd. and Bank of Montreal, the people added. Apollo hasn’t made a final decision on pursuing a sale and could still decide to keep the business, the people said.

Representatives for Apollo and Macquarie declined to comment. Representatives for McGraw-Hill Education and Bank of Montreal couldn’t immediately be reached for comment.

Apollo agreed in 2012 to acquire the business in a $2.5 billion deal with McGraw-Hill Cos. It had scrapped a merger with rival textbook maker Cengage last year after it ran into opposition from the U.S. Department of Justice.

©2021 Bloomberg L.P.

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