BOSTON – Houghton-Mifflin Co., one of the nation's largest textbook publishers and home to early American authors such as Ralph Waldo Emerson, has agreed to a nearly $1.8 billion buyout offer from a group led by educational publishing executive Barry O'Callaghan.
Under the deal announced Wednesday, the buyers are paying $1.75 billion in cash for Houghton. In addition, some Houghton managers and employees are rolling over $40 million in stock into shares of the new company, which is being called HM Rivergroup PLC.
HM Rivergroup is also assuming about $1.61 billion in debt in the deal.
Houghton Mifflin, the fourth-largest textbook publisher in the United States, is also home to authors including Emerson and Henry David Thoreau, as well as J.R.R. Tolkien.
Houghton, founded in 1832, is currently owned by affiliates of private investment firms Thomas H. Lee Partners, Bain Capital Partners, Blackstone Group and management.
Houghton estimates the company's educational materials generate about 90 percent of total revenue.