McGraw-Hill Closes $2.4 Billion Education Unit Sale to Apollo

McGraw-Hill Cos. completed the sale of its education unit to Apollo Global Management LLC for $2.4 billion in cash.

Some of the proceeds from the transaction will fund share buybacks, the New York-based firm said in a statement today distributed by PRNewswire. The remaining company, to be renamed McGraw Hill Financial Inc., is also using part of the $1.9 billion it will receive after tax to pay down short-term debt and the rest may pay for “selective tuck-in acquisitions,” according to the statement.

Chief Executive Officer Harold “Terry” McGraw III decided in September 2011 to sell the education division, which his great-grandfather started 125 years ago, after pressure from Jana Partners LLC, a New York-based hedge fund, and the Ontario Teachers’ Pension Plan.

The U.S. Department of Justice sued the company Feb. 4, alleging that its Standard & Poor’s ratings unit inflated grades to win business from Wall Street banks. S&P will be at the center of the new company, accounting for about half its revenue, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE