Houghton Mifflin Harcourt

Houghton Mifflin Harcourt Company (HMH) (Template:IPAc-en, Template:Respelling<ref name="Pronounce">

 Template:Cite web

</ref>) is an American publisher of textbooks, instructional technology materials, assessments, and reference works. The company is based in the Boston Financial District. It was formerly known as the Houghton Mifflin Company, but it changed its name following the 2007 acquisition of Harcourt Publishing.<ref>Template:Cite web</ref> Before March 2010, it was a subsidiary of Education Media and Publishing Group Limited, an Irish-owned holding company registered in the Cayman Islands and formerly known as Riverdeep. In 2022, it was acquired by Veritas Capital, a New York-based private-equity firm.

Company history

File:Hmif.jpg

Houghton Mifflin Harcourt at 222 Berkeley Street, Boston, Massachusetts

In 1832, William Ticknor and John Allen purchased a bookselling business in Boston and began to involve themselves in publishing; James T. Fields joined as a partner in 1843. Fields and Ticknor gradually gathered an impressive list of writers, including Ralph Waldo Emerson, Nathaniel Hawthorne, and Henry David Thoreau.<ref>Template:Cite book</ref> The duo formed a close relationship with Riverside Press, a Boston printing company owned by Henry Oscar Houghton. Houghton also founded his own publishing company with partner Melancthon Hurd in 1864, with George H. Mifflin joining the partnership in 1872.Template:Sfn

In 1878, Ticknor and Fields, now under the leadership of James R. Osgood, found itself in financial difficulties and merged its operations with Hurd and Houghton. The new partnership, named Houghton, Osgood and Company, and based in Boston's Winthrop Square,<ref>The Waldenses of To-day, George Edwin Waring Jr. (1879)</ref> held the rights to the literary works of both publishers.Template:Sfn When Osgood left the firm two years later, the business reemerged as Houghton, Mifflin and Company. Despite a lucrative partnership with Lawson Valentine, Houghton, Mifflin and Company still had debt it had inherited from Ticknor and Fields, so it decided to add partners. In 1884, James D. Hurd, the son of Melancthon Hurd, became a partner. In 1888, three others became partners as well: James Murray Kay, Thurlow Weed Barnes, and Henry Oscar Houghton Jr.Template:Sfn

Shortly thereafter, the company established an Educational Department, and from 1891 to 1908, sales of educational materials increased by 500 percent. The firm incorporated in 1908, changing its name to Houghton Mifflin Company.Template:Sfn Soon after 1916, Houghton Mifflin became involved in publishing standardized tests and testing materials, working closely with such test developers as E. F. Lindquist. By 1921, the company was the fourth-largest educational publisher in the United States.

In 1961, Houghton Mifflin famously passed on Julia Child's Mastering the Art of French Cooking, giving it up to Alfred A. Knopf who published it in 1962. It became an overnight success and is considered by many to be the bible of French cooking. Houghton Mifflin's strategic error was depicted in the 2009 film Julie & Julia.

In 1967, Houghton Mifflin became a publicly traded company on the New York Stock Exchange under the stock symbol "HTN".

In 1979, Houghton Mifflin acquired the complete catalog of Parnassus Press,<ref>Template:Cite book</ref><ref>Template:Cite book</ref><ref>Template:Cite book</ref> a Berkeley, California small press, established in 1957 by Herman Schein, the husband of writer-illustrator Ruth Robbins.<ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref> Works by authors included: Ursula K. Le Guin, Theodora Kroeber, Nicolas Sidjakov, Edward Ormondroyd, Charlotte Zolotow, Anne B. Fisher, Allen Say, Beverly Cleary, Crawford Kilian, Adrien Stoutenburg, and Sam DeWitt. In 1979, Houghton Mifflin acquired Clarion Books, the children's division of Seabury Press.<ref>Template:Cite news</ref> In 1980, Houghton Mifflin acquired the educational publishing operations of Rand McNally.<ref>Template:Cite web</ref>

Under (new from 1991) president Nader F. Darehshori Houghton Mifflin acquired McDougal Littell in 1994, for $138 million, an educational publisher of secondary school materials,<ref>Template:Cite web</ref> and the following year acquired D.C. Heath and Company,<ref>Template:Cite web</ref> a publisher of supplemental educational resources. In 1995, HMH acquired Chapters Publishing, a publisher of titles focused on cooking, gardening, and crafts.<ref>Template:Cite journal</ref> In 1996, HMH created their Great Source Education Group to combine the supplemental material product lines of their School Division, McDougal Littell, and Heath.

In 1998, HMH announced a sub-brand called LOGAL Software, which was to release a new line of interactive science software called Science Gateways, to support the United States curriculum.<ref>Template:Cite press release</ref> As of 2017, Houghton Mifflin Harcourt is offering the "Logal Science" brand as a licensing opportunity on its website.<ref>Template:Cite web</ref>

Mergers and acquisitions activities, 2001–

Mergers and acquisitions (M&A) activities have had significant effects on this company.

Vivendi purchase

In 2001, Houghton Mifflin was acquired by French media giant Vivendi Universal for $2.2 billion, including assumed debt. Vivendi Universal already owned the British children's publisher Kingfisher, which later became an imprint of Houghton Mifflin.<ref>Template:Cite web</ref> In 2002, facing mounting financial and legal pressures, Vivendi sold Houghton to private equity investors Thomas H. Lee Partners, Bain Capital, and Blackstone Group for $1.66 billion, including assumed debt (approximately 25% less than Vivendi had paid a year earlier).<ref>SUZANNE KAPNER AND ANDREW ROSS SORKIN. "Market Place; Vivendi Is Said To Be Near Sale Of Houghton." New York Times, October 31, 2002</ref><ref>"COMPANY NEWS; VIVENDI FINISHES SALE OF HOUGHTON MIFFLIN TO INVESTORS." New York Times, January 1, 2003.</ref>

Riverdeep merger with Houghton Mifflin

On December 22, 2006, it was announced that Riverdeep PLC had completed its acquisition of Houghton Mifflin. The new joint enterprise would be called the Houghton Mifflin Riverdeep Group. Riverdeep paid $1.75 billion in cash and assumed $1.61 billion in debt from the private investment firms Thomas H. Lee Partners, Bain Capital, and Blackstone Group.<ref>"Irish company completes Houghton Mifflin acquisition" Template:Webarchive, Bookdownloading.com, December 22, 2006.</ref> Tony Lucki, a former non-executive director of Riverdeep, remained in his position as the company's chief executive officer until April 2009.<ref>Edgecliffe-Johnson, Andrew and Peter Smith. "Riverdeep in talks over $3.5bn takeover of Houghton Mifflin", Financial Times, October 25, 2006.</ref>

Houghton Mifflin sold its professional testing unit, Promissor, to Pearson plc in 2006.<ref>Template:Cite web</ref> The company combined its remaining assessment products within Riverside Publishing, including San Francisco-based Edusoft.

Harcourt merger

File:Houghton Mifflin Harcourt logo.svg

Logo used from 2010 to 2024.

On July 16, 2007, Houghton Mifflin Riverdeep announced that it signed a definitive agreement to acquire the Harcourt Education, Harcourt Trade, and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion. The expanded company would become Houghton Mifflin Harcourt. McDougal Littell was merged with Harcourt's Holt, Rinehart & Winston to form Holt McDougal.

In October 2007, Houghton Mifflin sold Kingfisher to Macmillan Publishers.<ref>Template:Cite web</ref>

On December 3, 2007, Cengage Learning (formerly Thomson Learning) announced that it had agreed to acquire the assets of the Houghton Mifflin College Division for $750 million, pending regulatory approval.

On November 25, 2008, Houghton Mifflin Harcourt announced a temporary freeze on the acquisition of new trade division titles, allegedly in response to the 2008 financial crisis.<ref>Trachtenberg, Jeffrey A. "Writers' Block: Houghton Won't Acquire New Books", Wall Street Journal, November 25, 2008.</ref> The publisher of the trade division resigned, apparently in protest.<ref>[1]Template:Dead link</ref> Many observers familiar with the publishing industry saw the move as a devastating blunder.<ref>[2] Template:Webarchive</ref><ref>Template:Cite news</ref>

Harcourt Religion was sold to Our Sunday Visitor in 2009.<ref>Template:Cite press release</ref>

Houghton Mifflin Harcourt restructuring

On July 27, 2009, the Irish Independent newspaper reported that Houghton Mifflin Harcourt's controlling shareholder EMPG was in the process of restructuring negotiations with its unsecured-debt holders that would lead to the conversion of the debt into equity. The news story reported that the unsecured debt holders would receive a 45% equity stake. As a result, the royal family of Dubai via their Istithmar World Capital investment vehicle became major stakeholders.<ref name="Dubai's royal family to buy up stake in EMPG">Template:Cite news</ref> Estimates were that EMPG would cut its debt from $7.3bn to $6.1bn. On August 15, 2009, the Financial Times reported in an interview with Houghton Mifflin Harcourt's CEO at the time, Barry O'Callaghan, that the refinancing had received approval from more than 90% of lenders. The terms included the holding company debt converting into 45% of the fully diluted common equity, an effective 25 percent relaxation of financial covenants, second lien lenders agreeing to convert their holdings into a PIK instrument, reducing annual interest costs by $100m, and a further $50m increase its working capital facility.<ref name="EMPG refinancing will cut $7.6bn debt">Template:Cite web</ref>

Second round restructuring

The company confirmed a further restructuring of Houghton Mifflin Harcourt's debts on January 13, 2010.<ref name="EMPG pushes for financial shake-up">Template:Cite web</ref> The proposed restructuring materially impacted the shareholders of EMPG, the former holding company of Houghton Mifflin Harcourt.Template:CN

Recapitalization in 2010

On February 22, 2010, Houghton Mifflin Harcourt announced that EMPG and HMH had reached an agreement to restructure the company's finances and recapitalize its balance sheet with a substantial infusion of fresh cash from institutional investors.<ref name="Houghton Mifflin Harcourt Secures">Template:Cite web</ref>

The agreement, supported by 100% of HMH's creditors, highlighted a reduction in the senior debt to $3 billion from the current $5 billion, with new equity issued to the senior debt holders (including Paulson & Co. and Guggenheim Partners),<ref name="Houghton Owner Restructures Debt">Template:Cite news</ref> conversion of the $2 billion mezzanine debt into equity and warrant, receipt of $650m of new cash from the sale of new equity. In addition to the key highlights, HMH announced its $100 million Innovation Fund to invest in the next generation of technology for the education industry.

The Irish Times<ref name="EMPG agrees $650m cash injection">Template:Cite news</ref> reported that the investments by the then equity holders of EMPG, including HMH's CEO at the time, Barry O'Callaghan, private clients of Davy Stockbrokers, Reed Elsevier, and others of over $3.5 billion would be written down to zero. Additionally, the Irish Independent reported that following the restructuring, the investors of EMPG would have a nominal investment in Houghton Mifflin Harcourt via warrants over 5% of the company if it exceeded the $10 billion valuation<ref name="EMPG restructuring an end for old order">Template:Cite news</ref> placed on the company at the time of the merger between Houghton Mifflin Riverdeep and Harcourt. In addition to the warrants in HMH, the EMPG shareholders would continue to hold a stake in the international investment vehicle, EMPGI, which has investments in China, the Middle East, and elsewhere.

The Financial Times reported<ref name="Debt deal averts HMH bankruptcy">Template:Cite web</ref> that no management changes were expected as part of the deal with both the CEO at the time, Barry O'Callaghan and the CFO, Michael Muldowney expected to remain in their roles. The Times reported that a new nine-member board was to be created, with the CEO as the only executive representative, one independent member, two representatives from Paulson & Co., and one director from each of Apollo, BlackRock, Guggenheim Partners, Fidelity, and Avenue Capital.

On March 10, 2010, Houghton Mifflin Harcourt announced that it had completed its re-capitalization.<ref name="Houghton Mifflin Harcourt Announces Successful Completion of Balance Sheet Recapitalization">Template:Cite web</ref> In addition to a new investment of $650 million of equity, the debt levels of the company were reduced by approximately 60% and the annual interest payments by over 75%. According to the Irish State Broadcaster, RTÉ, the old equity investors based in Ireland have lost all their investment.<ref name="O'Callaghan firm completes debt deal">Template:Cite news</ref> The Irish Independent reported that the old shareholders were denied a shareholders meeting to vote or discuss the restructuring.<ref name="Shareholder anger over EMPG deal">Template:Cite news</ref> The former shareholders have been left with warrants over 5% of the company, in the case its value recovers to previous levels.

On September 19, 2011, it was announced that Linda K. Zecher would be replacing Barry O'Callahan as chief executive officer and Director of Houghton Mifflin Harcourt after O'Callahan resigned. In July 2012, Zecher detailed her plans for post-bankruptcy to D.C. Denison at The Boston Globe.<ref>Template:Cite web</ref> Zecher went to HMH from Microsoft.<ref>Template:Cite web</ref>

In 2012, HMH acquired the culinary and reference portfolio of John Wiley & Sons, including CliffsNotes and Webster's New World Dictionary.<ref>Template:Cite web</ref>

HMH went public in November 2013.<ref>Template:Cite news</ref>

In 2014, Houghton Mifflin Harcourt sponsored Curious George (TV series) on PBS Kids, replacing Chuck E. Cheese.

On May 13, 2014, HMH bought Channel One News. In 2015, Houghton Mifflin struggled to find a charity that would accept royalties for Mein Kampf by Adolf Hitler.<ref>Template:Cite web</ref>

On February 15, 2017, John J. ("Jack") Lynch Jr., the former CEO of Renaissance Learning, was named the new CEO of Houghton Mifflin Harcourt.<ref>Template:Cite web</ref>

In 2018, HMH sold its Steck-Vaughn adult education titles to Paxen Publishing and its Riverside test publishing subsidiary to Alpine Investments.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>

In 2017, it was announced that Houghton Mifflin Harcourt would be getting involved in TV production with a planned 2019 Netflix series that will revive the Carmen Sandiego franchise.<ref>Template:Cite web</ref>

In April 2023, HMH acquired NWEA, a not-for-profit academic assessment company.<ref>Template:Cite press release</ref><ref>Template:Cite web</ref>

Sale of publishing assets to HarperCollins

On March 29, 2021, The Wall Street Journal reported that HarperCollins, a division of American mass media and publishing company News Corp, had reached a deal to buy HMH Books & Media for US$349 million. The sale includes HMH's trade publishing division and computer video game franchises, such as Carmen Sandiego and The Oregon Trail. The deal would enable HMH to pay down its debt, allowing it to further its digital-first strategy in educational publishing.<ref>Template:Cite news</ref> The deal was completed on May 10.<ref>Template:Cite press release</ref>

Acquisition by Veritas Capital

On February 22, 2022, a tender offer was announced by Veritas Capital to acquire HMH for $21 per share, or about $2.8 billion.<ref>Template:Cite news</ref> The tender deadline was originally April 1, before being extended to April 6 on March 29.<ref>Template:Cite web</ref> Before the tender date, there were over 36,000 contracts traded for the June 17 $22.5 strike price call options.<ref>Template:Cite web</ref> Many investors purchased call options based on numerous reports from institutional investors with large stakes in the company, claiming that the $21 per share offer was undervaluing the company.<ref>Template:Cite news</ref> On April 6, 57% of $HMHC shares were put up for tender, leading to the tender offer going through and HMH going private.<ref>Template:Cite web</ref> Once the sale was completed, the stock of Houghton Mifflin Harcourt was delisted from Nasdaq.

Leadership changes

On September 22, 2016, Zecher resigned from HMH and was replaced by Interim CEO and Board Member L. Gordon Crovitz. Crovitz is a former publisher of the Wall Street Journal.<ref>Template:Cite web</ref> On February 15, 2017, John J. "Jack" Lynch Jr., the former CEO of Renaissance Learning, was named the new CEO of HMH.<ref>Template:Cite web</ref>

Lynch brought former employee Jim O'Neill back to the company to lead the core division as GM and EVP.<ref>Template:Cite web</ref>

Catalog

HMH is also formerly home to media brands like Carmen Sandiego and The Oregon Trail; and brands including The Whole30; The Best American Series; The American Heritage and Webster's New World Dictionaries; Better Homes and Gardens; How to Cook Everything; the Peterson Field Guides; CliffsNotes; and many children's books, including the "Curious George" series and The Little Prince; as well as publishing the works of J. R. R. Tolkien for United States distribution.

Some other notable books include:

• The Handmaid's Tale, Margaret Atwood (1987) (E-book version)<ref>Template:Cite web</ref><ref>Template:Cite book</ref>

Houghton Mifflin Interactive

Houghton Mifflin Interactive was a wholly owned subsidiary of Houghton Mifflin Company that published titles including Inventor Labs.<ref>Template:Cite web</ref>

See also

• Template:C
• Books in the United States
• McGraw-Hill Education
• Pearson Education

Further reading

• Template:Cite book

External links

• Template:Official website
• Finding aid to the Houghton Mifflin Company letters (1859–1860) at Columbia University. Rare Book & Manuscript Library.