Книга: «Medical Dictionary»

Houghton Mifflin Harcourt (/ˈhoʊtn ˈmɪflɪn/^[1]) is an educational and trade publisher in the United States. Headquartered in Boston's Back Bay, it publishes textbooks, instructional technology materials, assessments, reference works, and fiction and non-fiction for both young readers and adults.

History

Houghton Mifflin Harcourt in Boston, Massachusetts

The company was formerly known as Houghton Mifflin Company but 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.

Potted history

In 1832, William Ticknor and James Thomas Fields had 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. Shortly after, Houghton also founded a publishing company with partner George Mifflin. In 1880, Ticknor and Fields and Houghton and Mifflin merged their operations, combining the literary works of writers with the expertise of a publisher and creating a new partnership named Houghton, Mifflin and Company. The company still had debt from when it merged from Houghton, Osgood and Company, so it decided to add partners. In 1884, James D. Hurd, the son of Melancthon Hurd became a partner. Three people in 1888 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. Soon after 1916, Houghton Mifflin became involved in publishing standardized tests and testing materials, working closely with such test developers as E.F. Lindquist. The company was the fourth-largest educational publisher in the United States in 1921.

In 1961, Houghton Mifflin famously passed on Julia Child's Mastering the Art of French Cooking, giving it up to Alfred A. Knopf who later published it in 1962. It went on to become 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.

In 1967, Houghton Mifflin became a publicly traded company on the New York Stock Exchange under the stock symbol HTN. The company is currently privately held and no longer trades under this symbol.

During the 1990s, Houghton Mifflin acquired both McDougal Littell, an educational publisher of secondary school materials, and D.C. Heath and Company, a publisher of supplemental educational resources. In 1996, the company created their Great Source Education Group to combine the supplemental material product lines of their School Division and these two companies.

Creation of Houghton Mifflin Harcourt

Mergers and acquisitions (M&A) activities have had major effects on this company.

Vivendi purchase

In 2001, Houghton Mifflin was acquired by French media giant Vivendi Universal for $2.2 billion including assumed debt. In 2002, facing mounting financial and legal pressures, Vivendi sold Houghton to private equity investors Thomas H. Lee Partners, Bain Capital, and The Blackstone Group for $1.66 billion, including assumed debt (approximately 25% less than Vivendi had paid a year earlier).^[2][3]

Riverdeep merger with Houghton Mifflin

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 The Blackstone Group.^[4] Tony Lucki, a former non-executive director of Riverdeep, remained in his position as the company's chief executive officer until April 2009.^[5]

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.

Harcourt merger

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 Littel was merged with Harcourt's Holt, Rinehart & Winston to form Holt McDougal.

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.^[6] The publisher of the trade division resigned, apparently in protest.^[7] Many observers familiar with the publishing industry saw the move as a devastating blunder.^[8][9]

Harcourt Religion was sold to Our Sunday Visitor in 2009 ^[10]

Houghton Mifflin Harcourt restructuring

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.^[11] Estimates were that EMPG would cut its debt from $7.3bn to $6.1bn. On August 15, 2009, the Financial Times newspaper reported in an interview with Houghton Mifflin Harcourt's CEO, 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.^[12]

Second round restructuring

A further restructuring of Houghton Mifflin Harcourt's debts was confirmed by the company on 13 January 2010.^[13] The proposed restructuring materially impacted the shareholders of EMPG, the former holding company of Houghton Mifflin Harcourt.^[14]

Recapitalization in 2010

On 22 February 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.^[15]

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),^[16] 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 Times^[17] reported that the investments by the then equity holders of EMPG, including HMH's CEO, 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^[18] 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 reported^[19] that no management changes were expected as part of the deal with both the CEO, 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 10 March 2010, Houghton Mifflin Harcourt announced that it had completed its re-capitalization.^[20] 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 the Irish State Broadcaster, RTE, the old equity investors based in Ireland has lost all their investment.^[21] The Irish Independent reported that the old shareholders were denied a shareholders meeting to vote on discuss the restructuring.^[22] The former shareholders have been left with warrants over 5% of the company, in the case its value recovers to previous levels.

Awards and accolades

Go George Go!, a mobile app for preschoolers, received the Editor's Choice Award from the Children's Technology Review in 2011.^[23]

Go Math!, a K–6 product, was named a Reader's Choice Top 100 product by District Administration in 2010.^[24]

Criticism and controversies

The company was ranked the 10th worst place to work in America, according to a glassdoor.com survey in 2009.^[25]

Notes

External links

• Houghton Mifflin Harcourt Company
  • School Division
  • Trade and Reference Division
• Edusoft
• Great Source Education Group
• Holt McDougal
• Riverdeep
• Riverside Publishing