Private equity giant Apollo Global Management is reportedly exploring a sale of its stake in education publisher McGraw-Hill Education that could value the company at up to $6 billion, including debt.

People familiar with the process reportedly told Bloomberg that McGraw-Hill could draw interest from private equity houses, as well as special purpose acquisition companies (SPACs).

Macquarie Group and Bank of Montreal have been drafted in to advise Apollo Global Management on its options, according to Bloomberg.

McGraw-Hill generates around $450 million in annual earnings before interest, tax, depreciation and amortisation (EBITDA), the report said, noting that some $300 million of this is generated by digital initiatives.

The company’s enterprise value could reach $5-6 billion if a sale goes ahead, according to the report.

Apollo Global Management in 2012 agreed to acquire McGraw-Hill in a $2.5 billion deal.

Last year, McGraw-Hill and rival Cengage were forced to cancel their plans to merge in a $5 billion transaction after running into opposition from the Department of Justice, with which the companies failed to agree a series of divestments required for the deal to go ahead.

Apollo Global Management, along with The Vistria Group, managed funds that owned BPP University, the for-profit higher education provider that was earlier this month sold to TDR Capital, as revealed by this publication.

Date published: 31 March 2021

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