Corp. pays $4.5 bil for publishing house
In one of the largest publishing mergers ever, Reed Elsevier has reached an agreement to acquire publisher Harcourt General for $4.5 billion, or $59 a share, while pacting with rival publisher Thompson Corp. to sell it certain Harcourt businesses for $2.06 billion.The two-pronged agreement cements Reed’s position as a leading scientific, technical and medical information business. Deal also makes Reed the leading information service in the U.S. education market. Harcourt, which owns a sizable education testing service, numerous textbook imprints and a small trade publishing house, Harcourt Brace, had revenues of $633 million and adjusted operating profits of $138 million in the year ending last Oct. 31. The family of Harcourt chair Richard A. Smith, which holds a large stake in the troubled General Cinema chain, owns roughly 28% of the company. “The strategic fit is excellent,” said Reed Elsevier topper Crispin Davis. “The combination of our businesses provides an exceptional platform for growth, focused on new and demonstrably superior Internet information services and solutions.” Reed Elsevier owns Cahners Business Information, the parent company of Daily Variety. Deal, which is subject to regulatory approval, is expected to be completed in the first quarter of 2001.