|Traded as|| NASDAQ: HMHC |
Russell 2000 Component
|Founder||Houghton Mifflin Harcourt, George Mifflin|
|Country of origin||United States|
|Headquarters location||Boston, Massachusetts, U.S.|
|Distribution||self-distributed (US) |
Raincoast Books (Canada trade)
Nelson (Canada textbooks)
Melia Publishing Services (UK)
Hachette Client Services (Latin America, South America, Asia and Europe)
|Key people||Jack Lynch, President and CEO|
|Publication types||Books, software|
|Imprints||Clarion, Graphia, Mariner, Sandpiper, HMH Books for Young Readers, John Joseph Adams Books, Mariner Books|
|No. of employees||4,000+|
|Official website|| www|
Houghton Mifflin Harcourt ( // ; HMH) is a publisher of textbooks, instructional technology materials, assessments, reference works, and fiction and non-fiction for both young readers and adults.
The company is based in Boston's Financial District. It was formerly known as Houghton Mifflin Company and changed its name following the 2007 acquisition of Harcourt Publishing.Prior to March 2010, it was a subsidiary of Education Media and Publishing Group Limited, an Irish-owned holding company registered in the Cayman Islands and formerly known as Riverdeep.
In 1832, William Ticknor and John Allen purchased a bookselling business in Boston and began to involve themselves in publishing. James Thomas Fields joined as a partner in 1843, and with Tickner gradually gathered an impressive list of writers, including Ralph Waldo Emerson, Nathaniel Hawthorne, and Henry David Thoreau.The duo formed a close relationship with Riverside Press, a Boston printing company owned by Henry Oscar Houghton. Houghton also founded his own publishing company with partner Melancthon Hurd in 1864, with George Mifflin joining the partnership in 1872.
In 1878, Ticknor and Fields, now under the leadership of James R. Osgood, found itself in financial difficulties and merged its operations with Hurd and Houghton. The new partnership, named Houghton, Osgood and Company, held the rights to the literary works of both publishers.When Osgood left the firm two years later, the business reemerged as Houghton, Mifflin and Company. Despite a lucrative partnership with Lawson Valentine, Houghton, Mifflin and Company still had debt it had inherited from Ticknor and Fields, so it decided to add partners. In 1884, James D. Hurd, the son of Melancthon Hurd, became a partner. In 1888, three others became partners as well: James Murray Kay, Thurlow Weed Barnes, and Henry Oscar Houghton Jr.
Shortly thereafter, the company established an Educational Department, and from 1891 to 1908, sales of educational materials increased by 500 percent. The firm incorporated in 1908, changing its name to Houghton Mifflin Company.Soon after 1916, Houghton Mifflin became involved in publishing standardized tests and testing materials, working closely with such test developers as E. F. Lindquist. By 1921, the company was the fourth-largest educational publisher in the United States.
In 1961, Houghton Mifflin famously passed on Julia Child's Mastering the Art of French Cooking , giving it up to Alfred A. Knopf who published it in 1962. It became an overnight success and is considered by many to be the bible of French cooking. Houghton Mifflin's strategic error was depicted in the 2009 film Julie & Julia .[ unreliable source? ]
In 1967, Houghton Mifflin became a publicly traded company on the New York Stock Exchange under the stock symbol HTN. In 1979, Houghton Mifflin acquired Clarion Books, the children's division of Seabury Press.
Under (new from 1991) president Nader F. Darehshori Houghton Mifflin acquiredMcDougal Littell in 1994, for $138 million, an educational publisher of secondary school materials, and the following year acquired D.C. Heath and Company, a publisher of supplemental educational resources. In 1995, the company acquired Chapters Publishing, a publisher of cooking, garden, and craft titles. In 1996, the company created their Great Source Education Group to combine the supplemental material product lines of their School Division, McDougal Littell, and Heath.
In 1998, HMH announced a sub-brand called LOGAL Software, which was to release a new line of interactive science software called Science Gateways , to support the United States curriculum.As of 2017, Houghton Mifflin Harcourt is offering the "Logal Science" brand as a licensing opportunity on its website.
In 2017, it was announced that Houghton Mifflin Harcourt would be getting involved in TV production with a planned 2019 Netflix series that will revive the Carmen Sandiego franchise.
Mergers and acquisitions (M&A) activities have had major effects on this company.
In 2001, Houghton Mifflin was acquired by French media giant Vivendi Universal for $2.2 billion including assumed debt. Vivendi Universal already owned the British children's publisher Kingfisher, which became a Houghton Mifflin imprint.In 2002, facing mounting financial and legal pressures, Vivendi sold Houghton to private equity investors Thomas H. Lee Partners, Bain Capital, and Blackstone Group for $1.66 billion, including assumed debt (approximately 25% less than Vivendi had paid a year earlier).
On December 22, 2006, it was announced that Riverdeep PLC had completed its acquisition of Houghton Mifflin. The new joint enterprise would be called the Houghton Mifflin Riverdeep Group. Riverdeep paid $1.75 billion in cash and assumed $1.61 billion in debt from the private investment firms Thomas H. Lee Partners, Bain Capital and Blackstone Group.Tony Lucki, a former non-executive director of Riverdeep, remained in his position as the company's chief executive officer until April 2009.
Houghton Mifflin sold its professional testing unit, Promissor, to Pearson plc in 2006. The company combined its remaining assessment products within Riverside Publishing, including San Francisco-based Edusoft.
On July 16, 2007, Houghton Mifflin Riverdeep announced that it signed a definitive agreement to acquire the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion. The expanded company would become Houghton Mifflin Harcourt. McDougal Littell was merged with Harcourt's Holt, Rinehart & Winston to form Holt McDougal.
In October 2007, Houghton Mifflin sold Kingfisher to Macmillan Publishers.
On December 3, 2007, Cengage Learning (formerly Thomson Learning) announced that it had agreed to acquire the assets of the Houghton Mifflin College Division for $750 million, pending regulatory approval.
On November 25, 2008, Houghton Mifflin Harcourt announced a temporary freeze on acquisition of new trade division titles, allegedly in response to the economic crisis of 2008.The publisher of the trade division resigned, apparently in protest. Many observers familiar with the publishing industry saw the move as a devastating blunder.
Harcourt Religion was sold to Our Sunday Visitor in 2009.
On July 27, 2009, the Irish Independent newspaper reported that Houghton Mifflin Harcourt's controlling shareholder EMPG was in the process of a re-structuring negotiations with its unsecured-debt holders that would lead to the conversion of the debt into equity. The news story reported that the unsecured debt holders would receive a 45% equity stake. As a result, the royal family of Dubai via their Istithmar World Capital investment vehicle became major stakeholders.Estimates were that EMPG would cut its debt from $7.3bn to $6.1bn. On August 15, 2009, the Financial Times reported in an interview with Houghton Mifflin Harcourt's CEO at the time, Barry O'Callaghan, that the refinancing had received approval of more than 90% of lenders. The terms included the holding company debt converting into 45% of the fully diluted common equity, an effective 25 per cent relaxation of financial covenants, second lien lenders agreeing to convert their holdings into a PIK instrument, reducing annual interest costs by $100m, and a further $50m increase its working capital facility.
A further restructuring of Houghton Mifflin Harcourt's debts was confirmed by the company on January 13, 2010.The proposed restructuring materially impacted the shareholders of EMPG, the former holding company of Houghton Mifflin Harcourt.
On February 22, 2010, Houghton Mifflin Harcourt announced that EMPG and HMH had reached an agreement to restructure the finances of the company and recapitalize its balance sheet with a substantial fresh cash investment by institutional investors.
The agreement, supported by 100% of HMH's creditors, highlighted a reduction in the senior debt to $3 billion from the current $5 billion, with new equity issued to the senior debt holders (including Paulson & Co. and Guggenheim Partners),conversion of the $2 billion mezzanine debt into equity and warrant, receipt of $650m of new cash from the sale of new equity. In addition to the key highlights, HMH announced its new $100m Innovation Fund, to invest in the next generation of technology for the education industry.
The Irish Timesreported that the investments by the then equity holders of EMPG, including HMH's CEO at the time, Barry O'Callaghan, private clients of Davy Stockbrokers, Reed Elsevier, and others of over $3.5 billion would be written down to zero. Additionally, the Irish Independent reported that following the restructuring, the investors of EMPG would have a nominal investment in Houghton Mifflin Harcourt via warrants over 5% of the company if it exceeded the $10 billion valuation placed on the company at the time of the merger between Houghton Mifflin Riverdeep and Harcourt. In addition to the warrants in HMH, the EMPG shareholders would continue to own a stake in the international investment vehicle, EMPGI which has stakes in China, the Middle East and elsewhere.
The Financial Times reportedthat no management changes were expected as part of the deal with both the CEO at the time, Barry O'Callaghan and the CFO, Michael Muldowney expected to remain in their roles. The Times reported that a new nine-member board was to be created with the CEO the only executive representative, one independent, two representative of Paulson & Co, and one director from each of Apollo, BlackRock, Guggenheim Partners, Fidelity and Avenue Capital.
On March 10, 2010, Houghton Mifflin Harcourt announced that it had completed its re-capitalization.In addition to a new investment of $650 million of equity, the debt levels of the company were reduced by approximately 60% and the annual interest payments by over 75%. According to the Irish State Broadcaster, RTÉ, the old equity investors based in Ireland has lost all their investment. The Irish Independent reported that the old shareholders were denied a shareholders meeting to vote or discuss the restructuring. The former shareholders have been left with warrants over 5% of the company, in the case its value recovers to previous levels.
On September 19, 2011, it was announced that Linda K. Zecher would be replacing Barry O'Callahan as chief executive officer and Director of Houghton Mifflin Harcourt after O'Callahan resigned. In July 2012, Zecher detailed her plans for post-bankruptcy to D.C. Denison at The Boston Globe.Zecher went to HMH from Microsoft.
In 2012, HMH acquired the culinary and reference portfolio of John Wiley & Sons, including CliffNotes and Webster's New World Dictionary .
The company went public in November 2013.
On May 13, 2014, HMH bought Channel One News. In 2015, Houghton Mifflin struggled to find a charity that would accept royalties for Mein Kampf by Adolf Hitler.
On February 15, 2017, John J. ("Jack") Lynch, Jr., the former CEO of Renaissance Learning, was named the new CEO of Houghton Mifflin Harcourt.
In 2018, HMH sold its Steck-Vaughn adult education titles to Paxen Publishing and its Riverside test publishing subsidiary to Alpine Investments.
On September 22, 2016, Zecher resigned from HMH and was replaced by Interim CEO and Board Member L. Gordon Crovitz. Crovitz is a former publisher of the Wall Street Journal.On February 15, 2017, John J. ("Jack") Lynch, Jr., the former CEO of Renaissance Learning, was named the new CEO of HMH.
Jack brought Jim O’Neill back to the company to lead the core division as GM and EVP.
HMH is also home to media brands like Carmen Sandiego and The Oregon Trail; and brands including The Whole30; The Best American series; The American Heritage and Webster's New World dictionaries; Better Homes and Gardens; How to Cook Everything; the Peterson Field Guides; CliffsNotes; and many children's books including Curious George and The Little Prince; as well as publishing the works of J. R. R. Tolkien for United States distribution.[ citation needed ]
The Learning Company (TLC) was an American educational software company owned by Houghton Mifflin Harcourt. The company produced a grade-based system of learning software and tools to improve productivity. Products for preschoolers through second graders included Reader Rabbit, and software for more advanced students included The ClueFinders. The company was also known for publishing licensed educational titles featuring characters such as Arthur, Scooby-Doo, Zoboomafoo, and Caillou.
Anglo Irish Bank was an Irish bank headquartered in Dublin from 1964 to 2011. It began to wind down after nationalisation in 2009. In July 2011 Anglo Irish merged with the Irish Nationwide Building Society, forming a new company named the Irish Bank Resolution Corporation. Michael Noonan, the Minister for Finance stated that the name change was important in order to remove "the negative international references associated with the appalling failings of both institutions and their previous managements".
Vivendi SA is a French mass media conglomerate headquartered in Paris. The company has activities in music, television, film, video games, book publishing, telecommunications, tickets and video hosting services.
Houghton Mifflin Harcourt Learning Technology, originally started as Riverdeep Interactive Learning, is a publishing house for educational online and CD-ROM products based in San Francisco, United States and Dublin, Ireland. Founded in 1995, Riverdeep was principally the creation of the Irish ex-investment banker Barry O'Callaghan. O'Callaghan was Riverdeep's CEO and controlling shareholder. Riverdeep also acquired the companies Broderbund, The Learning Company and Edmark, and became a distributor for said companies.
Harcourt was an American publishing firm with a long history of publishing fiction and nonfiction for adults and children. The company was last based in San Diego, California, with editorial/sales/marketing/rights offices in New York City and Orlando, Florida, and was known at different stages in its history as Harcourt Brace, & Co. and Harcourt Brace Jovanovich. From 1919 to 1982, it was based in New York City.
Bain Capital is an American private investment firm based in Boston, Massachusetts. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate. Bain Capital invests across a range of industry sectors and geographic regions. As of 2018, the firm managed more than $105 billion of investor capital.
Jefferies Group LLC is an American multinational independent investment bank and financial services company that is headquartered in New York City. The firm provides clients with capital markets and financial advisory services, institutional brokerage, securities research, and asset management. This includes mergers and acquisitions, restructuring, and other financial advisory services. The Capital Markets segment also includes its securities trading and investment banking activities.
Holt McDougal is an American publishing company, a division of Houghton Mifflin Harcourt, that specializes in textbooks for use in High Schools.
Barry O'Callaghan is a business executive and financier. Currently he is the Chairman and CEO of Rise Global. He formerly led Riverdeep for a decade, later known as EMPG and HMH. He grew the small educational software company into the largest K-12 publishing company in the American education system through a series of acquisitions that were funded by loans. As a result of cuts in school textbook purchases, excessive debt, and the end of the dot-com bubble, the company was taken over by bondholders in 2011. This almost wiped out the interests of shareholders and O'Callaghan's own fortune. After the fallout, he became CEO and partial owner of the international division, EMPGi.
Thomas H. Lee Partners, L.P. is an American private equity firm based in Boston, Massachusetts specializing in leveraged buyouts, growth capital, special situations, industry consolidations, and recapitalizations.
Apollo Global Management, Inc., is an global alternative investment manager firm. It was founded in 1990 by former Drexel Burnham Lambert banker Leon Black. Apollo is headquartered in New York City, with additional offices across North America, Europe and Asia. The company's stock is publicly traded on the NYSE under the symbol 'APO'.
Istithmar World is an investment firm based in Dubai, United Arab Emirates (UAE). This company is a state-run business owned by Dubai World, a Dubai government-owned company, and was established in 2003. Originally known as "Istithmar," the company was renamed as "Istithmar World" in 2008.
Cengage is an educational content, technology, and services company for the higher education, K-12, professional, and library markets. It operates in more than 20 countries around the world.
A club deal, in finance, refers to a leveraged buyout or other private equity investment that involves two or more private equity firms. It can also be referred as consortium or syndicated investment.
Education Media and Publishing Group International, more commonly known as EMPGI, is an education company with operations in China, India, Saudi Arabia, and Libya. EMPGI pays licensing fees to Houghton Mifflin Harcourt for exclusive overseas non-English reproduction rights to the library of content, which it then redesigns to meet local requirements in its target markets.
Education Media and Publishing Group, more commonly known as EMPG, is a holding company registered in the Cayman Islands with no operating subsidiaries. It also has a minority interest in an affiliate that focuses on markets outside the USA called EMPGI. In January 2009 the two big credit rating services, Moody's Investor Services and Standard & Poor's, reduced the rating of EMPG and warned that default on its debt was increasingly likely. On 10 April 2009 Moody's downgraded Houghton Mifflin Harcourt down to Caa3 from Caa1. In August 2009, EMPG announced that it had substantially reduced its debt, relaxed covenants and received incremental working capital facilities. Prior to March 2010, EMPG owned the legacy Riverdeep and Houghton Mifflin Harcourt businesses, which it acquired in 2006 and 2007, respectively.
Paulson & Co. Inc. is an American investment management firm, established by its president and portfolio manager, John Paulson in 1994. Specializing in "global merger, event arbitrage and credit strategies", the firm had a relatively low profile on Wall Street until its hugely successful bet against the subprime mortgage market in 2007.
M7 Group S.A. is a Luxembourg-based television provider which operates several direct broadcast satellite pay TV platforms: HD Austria in Austria, TéléSAT Numérique and TV Vlaanderen in Belgium, Skylink in Czech Republic and Slovakia, CanalDigitaal in the Netherlands, Focus Sat in Romania and UPC Direct in Hungary. It also operates a terrestrial pay television platform in Flanders, Belgium and offers B2B multimedia services.
Linda Zecher is an American executive who is the Managing Director of The Barkley Group since January 2017. She most recently served as the President, CEO and Director of Houghton Mifflin Harcourt, a global education and learning company. In the past she had worked as the Corporate Vice President of the Microsoft Worldwide Public Sector business unit until September 2011. Additionally she had served as the President and CEO of Evolve Corporation, as the Senior Vice President of Oracle, as a very early Vice President of PeopleSoft, and in several senior positions in Bank of America. She began her career as a geophysicist with Texas Instruments.
Irwin Gold is the Executive Chairman of Houlihan Lokey, Inc.. In 1988, Gold co-founded the Financial Restructuring Group of Houlihan Lokey and is today considered a leading expert in corporate debt restructuring. In the past 30 years, Gold has redefined the role of investment bankers in financially distressed transactions and pioneered the use of now common restructuring and liability management techniques, such as pre-arranged and pre-packaged Chapter 11 cases, larger-scale 363 asset sales and creative exchange offer structures. His expertise in these areas has led Gold to play a major role in restructuring debt for global corporations, including Charter Communications, Metro-Goldwyn-Mayer (MGM), Southern California Edison, Delta Air Lines, and WorldCom.
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