Press release

Cengage and McGraw-Hill to Merge, Providing Students with More Affordable Access to Superior Course Materials and Platforms

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McGraw-Hill and Cengage today announced
that they have entered into a definitive agreement to combine in
an all-stock merger on equal terms. The transaction, which has been
unanimously approved by the Boards of Directors of both companies, will
bring together two premier learning companies that will deliver
significant benefits for students, educators, professionals and
institutions worldwide.

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“The new company will offer a broad range of best-in-class content –
delivered through digital platforms at an affordable price,” said
Michael E. Hansen, CEO of Cengage. “Together, we will usher in an era in
which all students can afford the quality learning materials needed to
succeed – regardless of their socioeconomic status or the institution
they attend. Additionally, the combined company will have robust
financial strength to invest in next-generation products, technology and
services that create superior experiences and value for millions of

“For more than a century, our goal has been to unlock the potential of
each learner and improve lives through education,” said Nana Banerjee,
President and CEO of McGraw-Hill. “Combining our two companies and our
complementary offerings will enable us to continue innovating. In this
way we can continue to empower students and educators around the world
with a wide choice of affordable, engaging course materials and advanced
digital platforms to help them succeed throughout a lifetime of

Cengage and McGraw-Hill are two organizations with complementary
missions, capabilities and talent. Both have long-established offices
and powerful brands in more than 100 countries and serve educators and
students in K-12, Higher Education, English Language Teaching,
Professional, Medical and Library Reference markets. Together, the new
company will be even better positioned to create new, locally impactful
products that use leading educational technology to improve learning
experiences and outcomes.

Cengage is well-known for its focus on students and affordable access to
quality learning. The company’s recently launched subscription service
for U.S. college students, Cengage Unlimited, has already saved students
more than $60 million during the 2018-19 academic year alone. The
subscription service offers unlimited access to more than 22,000 eBooks,
online homework access codes and study guides, with low-cost print
rentals available. A subscription also includes free access to Chegg
Tutoring, Kaplan Test Prep, Quizlet, and Evernote’s note-taking app.

McGraw-Hill is a global leader in learning science and adaptive learning
solutions with its award-winning McGraw-Hill ALEKS and McGraw-Hill
Connect offerings. The company’s initiatives to lower costs for U.S.
college students and increase student achievement – such as its
Inclusive Access program, which provides college students with low-cost
digital materials on the first day of class – saved students well over
$55 million in 2018. McGraw-Hill brings partnerships with more than
14,000 authors and educators in numerous fields of study.

Expands Access to Best-in-Class Content:

  • The combined company will feature more than 44,000 titles from leading
    academics and experts, representing proven approaches to teach a wide
    variety of subjects.
  • PreK-12th grade educators will benefit from the combination of
    McGraw-Hill’s full portfolio of literacy, math, science and humanities
    curricula, and best-in-class adaptive technologies, with Cengage
    Advanced Placement offerings.

Enhances Learning Experiences through Proven
Digital Platforms

  • The combined company will offer proven digital platforms and create
    better user experiences for all students globally, delivering seamless
    integration with other platforms, tools and applications.

Strengthens Commitment to More Affordable

  • Both parties maintain their commitment to high quality affordable
    solutions for U.S. college students. This includes a commitment to
    continuing and growing their Inclusive Access and Unlimited programs,
    with an opportunity to combine content and broaden the program
    offerings upon approval of the merger.
  • The combined company will target cost synergies estimated at
    $300 million over the next three years. This will unlock additional
    resources to increase value for students and educators by investing in
    areas such as adaptive learning, artificial intelligence, gamification
    and model-based testing tools.

Delivers Superior Experience and Value:

  • With a focus on best-in-class content, proven digital platforms and
    affordability, the new company will be well-positioned to deliver
    superior experiences and greater value for students, educators and
  • The combined company’s learning platforms will better equip educators
    with advanced analytics to act earlier and enable students to achieve
    their full potential.


The parties anticipate that the combined company will be named McGraw
Hill, with details to be finalized prior to closing. The company
will be led by Michael E. Hansen, currently CEO of Cengage. Nana
Banerjee, who played a key role in facilitating the agreement to merge
and in negotiating the material terms of the transaction, will continue
to lead McGraw-Hill through the transition. The combined company’s
leadership team is expected to be comprised of members from both
McGraw-Hill and Cengage and will be announced prior to close.

Based on the financial statements of Cengage and McGraw-Hill for the
twelve months ending March 31, 2019, the combined company would have pro
forma cash revenue of $3,157 million and cash EBITDA less Prepub of $889
million including the pro forma impact of $300 million of cost synergies.

The transaction is expected to close by early 2020, subject to customary
closing conditions, including receipt of regulatory approvals.

For more information, please visit

Joint Conference Call and Webcast Details

Cengage and McGraw-Hill will conduct a live conference call and webcast
today at 8:30 a.m. ET. The webcast of the conference call can be found here
with related slides available on each company’s website. To join the
call via phone, please dial (877) 407-9208 (domestic) and (201) 493-6784

The conference will also be available for replay through the McGraw-Hill
and Cengage websites, or at (844) 512-2921 (domestic) and (412) 317-6671
(international) through May 15, 2019. The replay ID is 13690450.

About Cengage

Cengage is the education and technology company built for learners. We
offer valuable options at affordable price points, including our
industry-leading initiative Cengage Unlimited, the first-of-its-kind
all-access digital subscription service for higher education. We embrace
innovation to create learning experiences that build confidence and
momentum toward the future students want. Headquartered in Boston,
Cengage also serves K-12, library and workforce training markets around
the world. Visit us at
or find us on Facebook,
or Twitter.

About McGraw-Hill

McGraw-Hill is a learning science company that delivers personalized
learning experiences that help students, parents, educators and
professionals drive results. We focus on educational equity,
affordability and learning success to help learners build better lives.
Headquartered in New York City, McGraw-Hill has offices across North
America, Asia, Australia, Europe, the Middle East and South America, and
makes its learning solutions for PreK-12, higher education,
professionals and others available in more than 75 languages. Visit us
or find us on Facebook,
or Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as: “anticipate,” “intend,” “plan,” “goal,”
“seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “will”
and similar references to future periods. Forward-looking statements are
neither historical facts nor assurances of future performance. Instead,
they are based only on the parties’

current beliefs, expectations and assumptions regarding the future of
the parties’ business, future plans and strategies, projections,
anticipated events and trends, the economy and other future conditions.
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict and many of which are outside of the
parties’ control. These risks include the risk that the transaction may
not be completed in a timely manner or at all, which may adversely
affect Cengage’s and/or McGraw-Hill’s businesses; the failure to satisfy
the conditions to the consummation of the transaction; the occurrence of
any event, change or other circumstance that could give rise to the
termination of the merger agreement; the effect of the announcement or
pendency of the transaction on Cengage’s and/or McGraw-Hill’s business
relationships, operating results and business generally; the risk that
the proposed transaction may disrupt current plans and operations and
the potential difficulties in employee retention as a result of the
transaction; the risk that management’s attention may be diverted from
Cengage’s and/or McGraw-Hill’s ongoing business operations, as
applicable; and the outcome of any legal proceedings that may be
instituted against the parties related to the merger agreement or the
transaction. You should consider these factors, as well as other factors
that are outlined in the “Risk Factors” section of Cengage’s FY18 Annual
Report for the period ended March 31, 2018 and the “Special Note
Regarding Forward-Looking Statements” section of the same report, as
well as the other factor that are outlined in the “Risk Factors” section
of McGraw-Hill’s FY18 Annual Report for the period ended December 31,
2018 and the “Special Note Regarding Forward-Looking Statements” in the
same report, both located on the respective company’s website. Cengage’s
FY19 Annual Report will be posted to the Company website later in May
2019. Any forward-looking statement made by the parties in this press
release is based only on information currently available to the parties
and speaks only as of the date on which it is made. The parties
undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or otherwise.