Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Apax’s Cengage Said Poised to Pick Alvarez for Restructuring

Cengage Learning Inc., the textbook publisher owned by Apax Partners LLP, is poised to hire Alvarez & Marsal Inc. to advise on restructuring options as deadlines approach to repay or refinance maturing debt, said people with knowledge of the matter.

Company executives and private-equity firm Apax have been interviewing advisers this month, said the people, who asked not to be named because the deliberations are private. Cengage, which has more than $2 billion in debt due next year, reported an 18 percent drop in revenue for the six months ended Dec. 31.

Cengage had about $5.36 billion in debt at the end of 2012. Apax, which took the company private in 2007, has been buying up the publisher’s debt at a discount, potentially giving the London-based buyout firm more influence in any restructuring.

Cengage spent $50 million buying back its own debt at a discount last quarter, Chief Executive Officer Michael Hansen said on a conference call this month. Hansen, who joined the publisher in September, has revamped management and shifted to more digital products and subscriptions to help revive revenue as students increasingly shy away from buying textbooks new.

James McCusker, a spokesman for Cengage, and Rebecca Baker, a spokeswoman for Alvarez, declined to comment. Representatives for Apax didn’t respond to e-mails seeking comment. The Wall Street Journal reported earlier that Cengage is in talks with Alvarez.

Cengage develops teaching materials for colleges, schools, libraries and corporations, and provides print and electronic publishing. Apax led the group that acquired the educational publisher from Thomson Reuters Corp. for $7.75 billion in 2007. Alvarez, founded three decades ago, has provided strategic advice for industries such as consumer products, automotive and health-care, according to its website.

Apax’s Moves

Apax bought a “substantial” sum of Cengage’s debt on the open market last quarter, mostly in first liens, Hansen said on a Feb. 13 earnings call. First-lien creditors have priority over other lenders. At the time, Hansen referred further questions to the buyout firm.

Moody’s Investors Service lowered its corporate family rating on Cengage in November to Caa3, citing declines in revenue and earnings and the challenge of cutting back its debt due over the next couple of years. The grade is the lowest in a category of debt “of very poor standing,” and Moody’s warned that the rating may fall further.

Cengage has $525 million in revolving credit lines, an amount poised to shrink to $300 million in July, further restricting its available liquidity and ability to buy back debt.

Meanwhile, publishing peers have consolidated. McGraw-Hill Cos. agreed in November to sell its education unit to Apollo Global Management LLC for $2.5 billion after deciding to focus on its financial-services business. Pearson Plc agreed in October to combine its Penguin unit with Bertelsmann SE’s Random House, forming the largest book publisher in the U.K. and the U.S.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.