Following the July 10 approval of Reed Elsevier's $5.7-billion purchase of Harcourt General by the U.K. Competition Committee, events moved swiftly—Reed completed its tender offer for Harcourt on July 11 and then, on July 13, finalized the sale of Harcourt's higher education and corporate training businesses to the Thomson Corp. for $2.06 billion. Reed retained Harcourt's STM and testing businesses and k—12 education group.
With the exception of the Bar/Bri and MicroMash units, the former Harcourt properties will become part of Thomson Learning. The addition of the divisions will boost Thomson Learning's annual revenues to more than $2 billion; international revenues will jump from $290 million to $430 million. Electronic publishing revenues will increase by approximately $180 million, to between $850 million and $900 million. To meet the requirements of the Justice Department, Thomson will sell 69 textbooks in 38 courses that had annual sales of approximately $10 million.
David Shaffer, chairman of Thomson Learning, told PW the purchase is a major step in completing the company's strategy of developing a global learning solutions business. While acknowledging that Thomson hoped to find cost savings of $75 million over the next three years, Shaffer said, "The driving force behind this deal was not about finding synergies, but about putting together blended solutions for lifelong learning." Thomson's "Find-Learn-Measure" strategy was devised three years ago and is aimed at helping customers find a learning solution; learn using the company's products and services; and measure success through its testing and assessment services.
A number of the newly acquired Harcourt properties will continue as stand-alone units, but Thomson plans to close Harcourt's higher education offices in Fort Worth, Tex., and Philadelphia within the next 12 months and integrate those operations into Thomson's existing offices in Belmont, Calif., Cincinnati and Boston.
