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BOSTON, Nov 29, 2006 (UPI via COMTEX) -- Ireland's Riverdeep Holdings PLC, an educational software firm, said Wednesday it is buying Boston's Houghton Mifflin Inc., a big U.S. publisher.
The deal is worth about $3.4 billion, some $1.75 billion in cash plus the assumption of about $1.61 billion in net debt.
The sellers, Thomas H. Lee Partners, Bain Capital and the Blackstone Group, will pocket about 3.5 times what they put into Houghton Mifflin three years ago. Thomas H. Lee and Bain both hold 40 percent of Houghton Mifflin, and Blackstone owns the rest, the Financial Times said.
The management team of Riverdeep will own 51 percent of the resulting entity, while other Riverdeep investors will hold a 15 percent stake, and new investors get a 30 percent share. Houghton Mifflin management will have a 4 percent interest.
The transaction is structured as a reverse takeover, with Riverdeep creating an affiliate that will actually buy Houghton Mifflin and then turn around and buy Riverdeep itself.
The resulting entity will be based in Ireland to take advantage of its 12.5 percent corporate tax rates and related financial advantages.
URL: www.upi.com Copyright 2006 by United Press International
