Reed Buys Harcourt, Will Sell Parts to Thomson

Jim Milliot |

Oct 30, 2000

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Reed Buys Harcourt, Will Sell Parts to Thomson Jim Milliot -- 10/30/00 Reed Elsevier announced last Friday morning that it has agreed to acquire Harcourt General for $4.5 billion in cash plus the assumption of $1.2 billion of Harcourt debt. The purchase price of $59 per share was considered a fair offer by analysts; Harcourt's stock price closed at $52.10 the day before the purchase, but had had a 52-week low of $32.63. Immediately after Reed closes on the deal, it will sell Hacourt's domestic and international higher education units, NETglobal, Assessment Systems, Inc. and Drake Beam Morin to The Thomson Corp. for $2.06 billion in cash. Harcourt's sales for the fiscal year ending October 31, 2000, are projected to be about $2.3 billion, and Thomson said that the units it is acquiring generated revenues of $750 million. Reed is retaining Harcourt's k-12 education and testing divisions as well as its Science, Testing and Medical group, which includes subsidiaries such as W.B. Saunders, Mosby and Academic Press. Harcourt's trade division, which is part of the k-12 education group, will also be kept by Reed. Reed said that it will create two new divisions within Elsevier Science, called Science and Medical, to accommodate Harcourt's STM businesses. While Reed already has some major professional publishing companies in the U.S., the addition of the Harcourt school group will mark the Anglo-Dutch publisher's first significant foray into the American school publishing market. For fiscal 1999, the school unit had sales of $787 million, while the testing group had revenues of $159 million. Reed, which owns PW, said it expects to see cost savings of about $70 million over the next two years. Thomson said it expects to see synergies of $75 million over three years. The new units will become part of Thomson Learning led by Robert Christie.

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Reed Buys Harcourt, Will Sell Parts to Thomson
Jim Milliot -- 10/30/00

Reed Elsevier announced last Friday morning that it has agreed to acquire Harcourt General for $4.5 billion in cash plus the assumption of $1.2 billion of Harcourt debt. The purchase price of $59 per share was considered a fair offer by analysts; Harcourt's stock price closed at $52.10 the day before the purchase, but had had a 52-week low of $32.63. Immediately after Reed closes on the deal, it will sell Hacourt's domestic and international higher education units, NETglobal, Assessment Systems, Inc. and Drake Beam Morin to The Thomson Corp. for $2.06 billion in cash. Harcourt's sales for the fiscal year ending October 31, 2000, are projected to be about $2.3 billion, and Thomson said that the units it is acquiring generated revenues of $750 million.

Reed is retaining Harcourt's k-12 education and testing divisions as well as its Science, Testing and Medical group, which includes subsidiaries such as W.B. Saunders, Mosby and Academic Press. Harcourt's trade division, which is part of the k-12 education group, will also be kept by Reed.

Reed said that it will create two new divisions within Elsevier Science, called Science and Medical, to accommodate Harcourt's STM businesses.

While Reed already has some major professional publishing companies in the U.S., the addition of the Harcourt school group will mark the Anglo-Dutch publisher's first significant foray into the American school publishing market. For fiscal 1999, the school unit had sales of $787 million, while the testing group had revenues of $159 million. Reed, which owns PW, said it expects to see cost savings of about $70 million over the next two years.

Thomson said it expects to see synergies of $75 million over three years. The new units will become part of Thomson Learning led by Robert Christie.

A version of this article appeared in the 10/30/2000 issue of Publishers Weekly under the headline: