Platinum Equity to buy McGraw Hill in $4.5bn deal

Investment firm Platinum Equity has struck a $4.5bn (£3.2bn) deal to buy educational publisher McGraw Hill from current owner Apollo Global Management.

Founded in 1888, US-based McGraw Hill says it generates more than $1bn a year through its digital learning tools and platforms across more than 100 countries. Digital has grown as a source of total revenue from 25% in 2013 when it was acquired by asset management company Apollo to more than 60% today, with over 80% in its higher education business.

Platinum Equity is a global investment firm set up by Tom Gores which has more than $25bn in assets and a portfolio of 40 operating companies.

Gores said: “We believe in McGraw Hill’s mission to create a brighter future for learners of all ages around the world. The pandemic has been especially disruptive to education, and investing in innovative solutions, and digital learning tools in particular, is more important than ever. We are excited about the opportunity to put our operational and financial resources to work on behalf of students and teachers everywhere.”

McGraw Hill c.e.o. Simon Allen and his senior leadership team will continue to lead the business under Platinum’s ownership.

Allen said: “Our company has extraordinary strengths - the best talent, technology and content in the industry, a deeply trusted brand and an unwavering commitment to educators and students to help them thrive. Working with Apollo, we have transformed our business. Now, with Platinum’s resources and expertise, we will be positioned to accelerate our digital growth and to continue to lead the way as a trusted education partner during a dynamic time for the industry. I look forward to working with the Platinum team to build our business in a way that will benefit our customers, our employees and our investors.”

Platinum m.d. Luke Myers said the publisher was “highly scalable” and its new owners would “continue investing in the company’s existing educational offerings while pursuing new avenues for growth both organically and through potential strategic acquisitions”.

The sale is expected to be completed this summer, subject to regulatory approval.