Houghton Mifflin Harcourt Scholastic EDBRIEF

EDBRIEF: Houghton Mifflin Harcourt acquires Scholastic’s EdTech and Services Business

Houghton Mifflin Harcourt announced that it agreed to acquire Scholastic’s education technology and services business for $575 million in cash. The edtech business generated $249 million in revenues and $40 million in operational income in the 2014 fiscal year.

Through the acquisition HMH aims to get into a leading position in the intervention market as well as strengthen footprint in education technology, early learning and education services.

For Scholastic the sale will help the company to focus on its core businesses. The publisher plans to invest the proceeds of the sale, estimated at $360 – $370 million, into its Children’s Book Publishing and Distribution, Classroom and Supplemental Materials Publishing and International business segments.

The management team of Scholastic’s edtech business is expected to join HMH along with its 800 employees. The transaction is expected to close in the second quarter of this year.

Further Reading

  • Houghton Mifflin Harcourt to Acquire Scholastic’s Educational Technology and Services Business for $575 Million | BusinessWire
  • Scholastic To Sell Educational Technology Business To Houghton Mifflin Harcourt For $575 Million To Focus On Global Core Children’s Books And Supplemental Education Businesses | PR Newswire

Kay Alexander is the co-founder and creative director of EDUKWEST. You can follow him on Twitter, Facebook or Google+

  • Cristobal Viedma

    Recent deals such as LinkedIn’s move to acquire online tutorial company Lynda.com and this Houghton Mifflin Harcourt announcement demonstrate corporate giants see value in Ed Tech and that they—and the market—very much need startups. As HMH is to a big ocean liner (which is becoming even bigger with the Scholastic business)—we are to a speed boat. They need startups as the testing grounds for really good ideas and new markets. And startups need them for their experience, branding and industry strength.

    Despite the ed tech acquisitions, we still see the big guys ignoring two to six year old population—the ages when children’s brains are developing and learning the most. It’s given many startups, including us at Monkimun, the opportunity to dive into the hole of this market and provide learning tools for these parents and children.