And so it's official. Barry O'Callaghan has acquired Reed Elsevier's educational unit and Harcourt will be part of HM Riverdeep Group PLC at the end of this year, give or take a few months. Mr. O'Callaghan's good friend and colleague, and former head of Harcourt, will run the show. Tony Lucki will be one busy man if the deal is allowed to proceed.
The combination of Houghton Mifflin, Riverdeep and Harcourt Educational will create a mighty behemoth of educational materials. One would expect some regulatory body or other to take a close look so that Mr. O'Callaghan does not create a monopoly in the process of swallowing up these companies.
Davy Investors is going to provide $235 million in equity financing, and Credit Suisse will come up with even more capital, along with Lehman Brothers and Citi, while Reed Elsevier will hold 11.8% of the parent company. On top of some existing and hefty loans, the minnow with the hearty appetite is going to take on even more debt, to fund the acquisition that is said to be valued at $4 million.
A bold move by a bold little fish, swimming in the big pond. We all pray that Barry O'Callaghan can pull it off. Harcourt Education was in trouble to begin with, so what would have happened to it if Reed Elsevier couldn't unload it? Here's hoping that Mr. O'Callaghan proves to be a white knight, come to rescue a couple of struggling educational materials publishers.
But to suggest that T.S. Eliot or Longfellow, published by Harcourt and Houghton Mifflin in their day, would be proud that this mammoth company has been created? That's reaching a bit, isn't it?