Since 1888, educational publisher McGraw-Hill Education has been providing children everywhere with new and updated academic materials. The company has planned an initial public offering (IPO) for as early as the fourth quarter of 2015, potentially valuing the textbook company at around $5 billion, including debt. The scholastic publishers spoke with investment banks about the IPO, though underwriting will not be finalized before the summer. Following the back-to-school season, when McGraw-Hill Education generates the most of its revenue from textbook sales, is when the company aims to go public.
Growing up, every child remembers going to school using educational materials by the textbook company named McGraw-Hill Education. It is now one of the largest educational publishers in the world, selling textbooks for school, university students and professionals in about 60 languages. Private equity firm Apollo Global Management LLC who acquired the business in March 2013 for $2.4 billion owns the New York-based company, McGraw-Hill Education.
Since the acquisition, Apollo has helped increased the company’s profits and supported its digital materials, and cut costs.
Last year, McGraw-Hill Education generated $321 million in EBITDA 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 currently has $1.5 billion in debt as a result.
Its main competition includes Pearson Plc. and Cengage Learning Inc., like its peers, they have focused on making most of its material available on the Internet as more people read books on tablets and phones. Another educational publisher, Houghton Mifflin Harcourt Co went public in November 2013 after it emerged from bankruptcy since then shares have risen more than 60% from the IPO.