16th Jul 2007 18:31
Reed Elsevier PLC16 July 2007 NEWS RELEASE For immediate release 16 July 2007 Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV Reed Elsevier announces sale of Harcourt US Schools Education Business to Houghton Mifflin Riverdeep Group for $4.0 billion Reed Elsevier is pleased to announce today that it has entered into a definitiveagreement to sell its Harcourt US Schools Education business to Houghton MifflinRiverdeep Group for a consideration of $4.0 billion, with $3.7 billion payablein cash and $0.3 billion payable in common stock of Houghton Mifflin RiverdeepGroup. On completion of the sale and the previously announced disposal of HarcourtAssessment and Harcourt Education International to Pearson plc, Reed Elsevierwill have sold the whole of its Harcourt Education division for total grossproceeds of $4.95 billion, representing 20.8x 2006 adjusted operating profit.The sale of the US Schools Education businesses is expected to complete by thefirst half of 2008 following US regulatory review. Reed Elsevier announced its intention to sell its Harcourt Education division inFebruary this year in order to sharpen its strategic focus on the growingdigital opportunities in its Scientific & Medical, Legal and Business divisions.The sale of Harcourt Education will help create a more focused and cohesivebusiness, well placed to deliver consistent adjusted earnings per share growthof a minimum of 10% annually at constant currencies. The Harcourt Education division was largely acquired by Reed Elsevier in July2001 as part of its acquisition of Harcourt General Inc which also brought ReedElsevier a strong science journals business and a leading position in thegrowing health sciences market. The education businesses accounted for $2.1billion of the consideration paid for Harcourt General Inc.The Harcourt Education division reported 2006 total revenues of $1,637 millionand adjusted operating profits, before the amortisation of acquired intangibleassets, of $238 million, of which the Harcourt US Schools Education businesscontributed $1,113 million and $228 million respectively. The capital employedof the Harcourt Education division as at 31 December 2006 was $2,580 million,including goodwill and intangible assets, of which the US Schools Educationbusiness was $1,978 million, with gross assets of $2,174 million. The aggregate net proceeds of the sale of the Harcourt Education division, aftertaxes and other separation and transaction costs, are estimated to beapproximately $4.0 billion. It is intended to return the net proceeds to ReedElsevier shareholders, following completion of the sale transactions expected inthe first half of 2008, by way of special dividend followed by a correspondingconsolidation of the outstanding share capital. Commenting, Sir Crispin Davis, Chief Executive Officer of Reed Elsevier, said: "We are pleased to announce the sale of the Harcourt US Schools business at aprice that recognises the exceptional quality of the Harcourt assets and of itsmanagement and staff. "Following the sale, Reed Elsevier will be a sharper and more focused company.With our leading brands and authoritative content, we are well positioned tomaximise the digital opportunities in our chosen markets." UBS Investment Bank has acted as financial advisor to Reed Elsevier on the saleof the Harcourt Education division. - ENDS - Enquiries Sybella Stanley (Investors)+44 20 7166 5630 Patrick Kerr (Media)+44 20 7166 5646 This statement contains forward looking statements within the meaning of Section27A of the Securities Act 1933, as amended, and Section 21E of the SecuritiesExchange Act 1934, as amended. These statements are subject to a number of risksand uncertainties and actual results and events could differ materially fromthose currently being anticipated as reflected in such forward lookingstatements. The terms 'expect', 'should be', 'will be', and similar expressionsidentify forward looking statements. Notes to editors The Harcourt US Schools Education business comprises the basal and supplementalpublishers Harcourt School Publishers and Holt, Rinehart and Winston,respectively leading US elementary and secondary school publishers, andGreenwood-Heinemann and Harcourt Trade Publishers, respectively the publisher ofteachers' development and library resources and the specialist US tradepublisher. Reed Elsevier announced on 4 May 2007 that it had agreed to sell HarcourtAssessment and Harcourt Education International to Pearson plc for $950 million.The sales of the International education businesses in the UK, Australia and NewZealand have completed. The sales of the education business in South Africa, theGlobal Library business and Harcourt Assessment remain subject to regulatoryreview.Reed Elsevier is a world leading publisher and information provider. It is ownedequally by its two parent companies, Reed Elsevier PLC and Reed Elsevier NV. Theparent companies are listed on the London, Amsterdam and New York StockExchanges, under the following ticker symbols: London: REL; Amsterdam: REN; NewYork: RUK and ENL. In 2006, Reed Elsevier made adjusted profit before taxationof £1,052 million on turnover of £5,398 million. The group employs 37,000people, including approximately 20,000 in North America. Operating in thescientific, legal, educational and business-to-business sectors, Reed Elsevierprovides high value and flexible information solutions to professional endusers, with increasing emphasis on internet delivery. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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