McGraw-Hill to split into two listed companies
McGraw-Hill Companies Inc
Last month, McGraw-Hill's directors and executives met with Jana Partners LLC, a hedge fund, and the Ontario Teacher's Pension Fund to hear their arguments that the company should be broken up.
McGraw-Hill will split into McGraw-Hill Markets, which would include its Standard & Poor's ratings business, and McGraw-Hill Education, which will contain the textbook publishing and education units.
The break-up, which will be structured as a tax-free spin-off of the education business to McGraw-Hill shareholders, is expected to be completed by the end of 2012.
The company said McGraw-Hill Markets serves customers in more than 150 countries and expects revenues of approximately $4 billion in 2011.
The company is also searching for a chief executive for McGraw-Hill Education, which expects revenue of about $2.4 billion for the year.
Evercore and Goldman Sachs are advising on the spinoff.
McGraw-Hill said it is also looking to make cuts from $1 billion in corporate expense and administrative and technology costs.
The company said it would also speed up the pace of share repurchases to a total of $1 billion for 2011.
Shares of the company closed at $38.72 on Friday on the New York Stock Exchange.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Sriraj Kalluvila)
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