Apollo Global Management (APO) is considering the sale of McGraw-Hill Education in a deal that would value the educational publisher at $5 billion to $6 billion including debt.
Individuals familiar with the matter told Bloomberg News that the New York private-equity giant is interested in striking a deal with PE firms and may also consider an agreement with a special purpose acquisition company.
Apollo declined to comment to the news service. McGraw-Hill Education, New York, and its financial advisers, Macquarie Group and Bank of Montreal, were unavailable for comment to Bloomberg.
McGraw-Hill Education annually posts $450 million of earnings before interest, taxes, depreciation and amortization, the sources said.
Digital sources make up about $300 million, or two-thirds, of the brand’s earnings, as the New York education company has updated its options to include “electronic textbooks and virtual learning, they added.
If Apollo does pursue a sale, McGraw-Hill Education could bring $5 billion and $6 billion including debt. The PE giant also could choose to keep the company, the sources said.
Apollo acquired McGraw-Hill Education in 2012 in a $2.5 billion deal with McGraw-Hill Cos., Bloomberg said.
Apollo Group last year attempted a merger with the Boston textbook maker Cengage, but the proposal was opposed by the Justice Department's antitrust authorities, who argued that the combination would hurt competition.
At last check Apollo Global Management shares were 0.6% lower at $47.38.
A recent report says Apollo Global may soon offer associates bonuses between $100,000 to $200,000 to stay with the company.
The bonuses, which would require the recipients to stay with the firm least through September 2022, stem from the departure of several associates during the pandemic, the report said.