Boston (AP) — Houghton Mifflin Co. said Monday it is selling its college unit to educational publisher Cengage Learning for $750 million in cash as it focuses more on its kindergarten through 12th grade, trade and reference businesses.Cengage, previously known as Thomson Learning, said it will use additional term loans under an existing credit agreement to help finance the deal. Private equity firms Apax Partners and Omers Capital Partners will also make an additional equity investment.
In July Thomson Corp. completed the sale of most of its Thomson Learning assets to a group of funds advised by Apax and Omers for about $7.75 billion.
Cengage said in a statement that the Houghton unit acquisition will help broaden its educational products, which include textbooks and study guides.
Boston-based Houghton Mifflin and Cengage also will enter a long-term deal after the acquisition is complete to expand Cengage’s titles into more U.S. high school advanced-placement and honors programs.
Privately held Houghton Mifflin, which has more than $1.4 billion in sales, is a unit of Education Media and Publishing Group Ltd. The parent company said the sale will help it to concentrate on integrating Houghton Mifflin with Harcourt Education, which it is buying from Reed Elsevier PLC. The company agreed to buy Harcourt Education, Harcourt Trade and Greenwood-Heinemann in a $4 billion cash and stock deal in July.
The acquisition is expected to close in the first half of 2008, subject to regulatory approvals and other closing conditions.