Boy, MH really dodged a bullet with this one!
https://www.thebookseller.com/news/mcgraw-hill-and-cengage-call-planned-merger-1201898
7 replies (most recent on top)
Apollo is either going to sell the company off in parts, or as one or two units. At this stage, what real choice to they have?
Ummmmmm: https://www.bloomberg.com/opinion/articles/2020-08-20/covid-19-back-to-school-doubts-crush-textbook-publishers
Trust me when I say that not having to work at a company run by Michael Hansen is a win.
Having worked for McGraw Hill for about 30 years, I feel it's fair to say that top management is ill-equipped to compete on the digital frontier (and the death by a thousand cuts like OER, lean digital ed tech players, even mega giants such as Amazon, Google etc. continues apace!) there are hundreds of positions there that are so obviously redundant and/or outmoded. Also, it's a plain fact that Apollo previously did not bother to dig in at all on just exactly what the top brass were thinking about how to deal with this reality. The Cengage merger meant that Apollo could get what it wanted–staff reductions and reduced operating costs–without itself having to invest any resources on overseeing the top management's actions. That all likely changes now. Congrats McGraw Hill is perhaps true, but only in the short run.
@blv+14NXCIld MHE (well, actually Apollo) agreed to the merger because they need a viable plan to make the company attractive enough to be able to either a) sell it (unlikely), or b) go public and finally get rid of their shares.
The merger was all about an exit strategy for Apollo
Hard to say. Continued struggle, one imagines. Right after they had announced the intent to merge, Hanson indicated that one of the benefits of combining the companies would be something like $3-400M in savings, mainly realized through the reduction in personnel, so one imagines that a whole lot of jobs have been saved as a result of this.
On the other hand, both companies are now back to where they started and that picture wasn't the rosiest one to begin with, but it does at least seem like the strangulation will be a lot slower than it would have been.
The other huge benefit, having been unfortunate enough to have suffered through part of the Hanson reign, is that MH has been spared that awful experience. The new MH CEO seems like a bright and promising fellow - I'd say that longer term MH is in a much, much better position now than they might have been.
Now if we can only kick this virus thing . . .
Interesting to see how this works out for both companies. McGraw was having layoffs before this, and there had to be some reason they felt they needed the merger in the first place. It was an agreed upon merger, not a hostile takeover.