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McGraw-Hill Offered $3 Billion for Education Unit, Reuters Says

McGraw-Hill Cos. (MHP), the finance and publishing company that said last year it would spin off its education business, was offered about $3 billion for the unit, Reuters reported.

Apollo Global Management LLC, Bain Capital Partners LLC, Cengage Learning Inc. and Thomas H. Lee Partners LP made proposals to buy the business, the newswire reported, citing people it didn’t identify. A sale for $3 billion or more would be more lucrative than a spinoff, according to Peter Appert, an analyst at Piper Jaffray & Co. in San Francisco.

McGraw-Hill, the New York-based owner of Standard & Poor’s, plans to break into two companies by the end of the year, one focused on financial information and the other on educational publishing. The education business would have made $162 million last year on $2.29 billion of revenue, the company said last month in a regulatory filing.

“If they get the right price, they’ll sell it, and if they don’t, they won’t,” Appert said in a telephone interview. “I definitely would think that there would be significant interest from the private-equity firms but it’s all about price.”

Patti Rockenwagner, a spokeswoman for the company, declined to comment. While the education business would be worth about $2.5 billion in a spinoff, McGraw-Hill would need to get more in a sale to make up for a bigger tax bill, Appert said.

Apollo spokesman Charles Zehren declined to comment, as did Matt Benson, a spokesman for THL. Bain spokesman Alex Stanton didn’t immediately return a phone call seeking comment, and Lindsay Brown, a spokeswoman for Cengage, didn’t immediately return an e-mail seeking comment.

McGraw-Hill rose 0.3 percent to $46.84 at the close of trading in New York.

To contact the reporter on this story: Zeke Faux in New York at zfaux@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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