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McGraw-Hill to Sell Education Business to Apollo for $2.5 Billion



      McGraw-Hill to Sell Education Business to Apollo for $2.5 Billion

McGraw Hill Financial To Be A High-Margin Global Benchmark and Analytics
Powerhouse with Strong Cash Flow and Faster Growth Potential

PR Newswire

NEW YORK, Nov. 26, 2012

NEW YORK, Nov. 26, 2012 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies
(NYSE: MHP) ("the Company") today announced it has signed a definitive
agreement to sell its McGraw-Hill Education business to investment funds
affiliated with Apollo Global Management, LLC (NYSE: APO) (collectively with
its subsidiaries, "Apollo"), for a purchase price of $2.5 billion, subject to
certain closing adjustments.  As part of this transaction, McGraw-Hill will
receive $250 million in senior unsecured notes issued by the purchaser at an
annual interest rate of 8.5%.  The transaction, which is expected to close in
late 2012 or early 2013, is subject to regulatory approval and customary
closing conditions.

Upon closing, McGraw-Hill, which will be renamed McGraw Hill Financial
(subject to shareholder approval), will be a high-growth, high-margin
benchmarks, content and analytics company in the global capital and
commodities markets.  With customers in more than 150 countries, McGraw Hill
Financial expects 2012 revenue of approximately $4.4 billion with nearly 40%
from international markets.  The Company will provide 2013 financial guidance
for McGraw Hill Financial when it announces its 2012 fourth quarter and
year-end financial results.

"After carefully considering all of the options for creating shareholder
value, the McGraw-Hill Board of Directors concluded that this agreement
generates the best value and certainty for our shareholders and will most
favorably position the world-class assets of McGraw-Hill Education for
long-term success," said Harold McGraw III, Chairman, President and CEO of The
McGraw-Hill Companies who will lead McGraw Hill Financial once the transaction
is complete.  "We were able to secure an attractive outcome and create
additional balance sheet flexibility for McGraw Hill Financial."

Mr. McGraw added, "McGraw-Hill Education is a leader in digital learning with
world-class content and enormously talented and committed employees.  As we
begin the next chapter in our rich history, I am very proud of and grateful to
all the McGraw-Hill Education professionals who are contributing so much to
the company and to educators, administrators and students all over the world.
 I look forward to seeing their continued success with the expertise and
support of Apollo."

"We are excited about this announcement and what it means for McGraw-Hill
Education," added Lloyd G. "Buzz" Waterhouse, President and CEO of McGraw-Hill
Education.  "Apollo is a leading global alternative investment manager and its
affiliated funds have made significant investments in learning companies for
more than a decade.  McGraw-Hill Education's expertise and premier brands
coupled with Apollo's resources represent a powerful combination."

Larry Berg, Senior Partner of Apollo said, "With a longstanding track record
of investing behind leaders in education, Apollo is pleased to be acquiring a
marquee business that has been a pioneer in educational innovation and
excellence for over a century.  McGraw-Hill Education has a deep and
impassioned management team, and we share their enthusiasm and strategic
vision for the business.  We look forward to leveraging the company's leading
portfolio of trusted brands and innovative digital learning solutions to drive
growth through the ongoing convergence of education and technology on a global
basis."

"Today's transaction marks a transformative time for our company,
shareholders, customers and employees," Mr. McGraw said.  "This move builds on
McGraw-Hill's strong legacy and gives us an unprecedented opportunity to focus
on accelerating the growth of our iconic brands and leading franchises such as
Standard & Poor's, S&P Dow Jones Indices, S&P Capital IQ, Platts and J.D.
Power and Associates.  The strong trends driving global financial markets
create enormous growth opportunities for McGraw Hill Financial.  As markets
become more interconnected, as more borrowers around the world fund growth
through the capital markets, and as technology produces more and more data in
a complex world, our leading brands provide essential intelligence and
independent benchmarks across asset classes and markets."

Upon closing of the transaction, McGraw Hill Financial will have considerable
balance sheet flexibility.  The Company will use the estimated proceeds of
approximately $1.9 billion, net of tax and certain closing adjustments, from
this sale to sustain its share repurchase program, to make selective tuck-in
acquisitions that enhance McGraw Hill Financial's portfolio of powerful
brands, and to pay off any short-term borrowing obligations. 

Beginning in the fourth quarter of 2012, the Company will classify and report
results of McGraw-Hill Education as discontinued operations.  As a result of
this transaction, the Company anticipates a non-cash impairment charge in the
fourth quarter of approximately $450 to $550 million relating to the School
Education Group.

The McGraw-Hill Companies announced in September 2011 it would separate into
two industry-leading companies following a year-long strategic portfolio
review.  This decision was a key driver of the Company's Growth and Value
Plan, which also included a commitment to generate $100 million in cost
savings and a significant share repurchase program.  On November 2, 2012, the
Company provided an update of its progress on these initiatives and will do so
again when it announces its 2012 fourth quarter and year-end results.

McGraw-Hill received financial advice from Evercore Partners and Goldman,
Sachs & Co., and legal advice from Wachtell, Lipton, Rosen & Katz and Clifford
Chance.

Apollo received financial advice from Credit Suisse, UBS Investment Bank and
BMO Financial Group.  The financing is provided by Credit Suisse, Morgan
Stanley, Jefferies, UBS Investment Bank, Nomura and BMO.  Apollo received
legal advice from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Morgan,
Lewis and Bockius LLP.

About McGraw Hill Financial

McGraw Hill Financial will be a powerhouse in benchmarks and analytics for the
global capital and commodity markets and includes the following leading
brands: Standard & Poor's, S&P Dow Jones Indices, S&P Capital IQ, Platts,
Crisil, J.D. Power and Associates, McGraw-Hill Construction and Aviation
Week.  The Company's mission is to promote sustainable growth by bringing
transparency and independent insights to the global capital and commodity
markets.  The Company will have approximately 17,000 employees in more than 30
countries around the world.  For more information, please visit
www.mcgraw-hill.com.

About McGraw-Hill Education 

McGraw-Hill Education is a digital learning company that draws on its more
than 100 years of educational expertise to offer solutions which improve
learning outcomes around the world. McGraw-Hill Education is the adaptive
education technology leader with the vision for creating a highly personalized
learning experience that prepares students of all ages for the world that
awaits.  The Company has offices across North America, India, China, Europe,
the Middle East and South America, and makes its learning solutions available
in more than 65 languages.  For additional information,
visit www.mheducation.com.

Forward-Looking Statements

Statements in this news release that are not historical facts are
forward-looking statements. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are
difficult to predict.  Therefore, actual outcomes and results may differ
materially from what is expressed or implied in any forward-looking
statements.  In particular, the sale transaction described is subject to
certain risks and uncertainties, including the ability of the buyer to obtain
financing, the ability to obtain all required regulatory approvals and the
anticipated tax treatment of the sale and related transactions, as well as
risks relating to any unforeseen liabilities, losses, declines in economic
performance or future prospects.  More detailed information about factors that
may affect our performance may be found in our filings with the Securities and
Exchange Commission, including our most recent Annual Report on Form 10-K,
which can be obtained at its website at http://www.sec.gov.  We undertake no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.

Contacts: 
Patti Rockenwagner 
Senior Vice President, Corporate Communications 
(212) 512-3533 
patti_rockenwagner@mcgraw-hill.com

Chip Merritt 
Vice President, Investor Relations 
(212) 512-4321  
chip_merritt@mcgraw-hill.com 

SOURCE The McGraw-Hill Companies

Website: http://www.mcgraw-hill.com
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