Regular readers know we have been consistently skeptical that Cengage can get out from under their gigantic debt load of almost $5.5 billion without a restructuring of those obligations, despite the company’s pretense that things are fine and they are on their way to a possible IPO. And those prospects worsened still with “very disappointing” results for the quarter ending September 30 that has operating income below quarterly debt service payments. After that earnings report Moody’s downgraded Cengage’s debt yet again, and now Bloomberg tells investors the darker side of the story: “Bondholders of Cengage Learning may recover as little […]
Finance
Results Plunge at Cengage
Cengage has a new ceo, Michael Hansen (Ron Dunn is now executive chairman), who had the unpleasant task of announcing “very disappointing” results for the quarter ending September 30 last Friday: Sales fell 22 percent to $538 million, down from $692 million a year, and operating income declined 49 percent, to $122.7 million, less than debt service for the quarter of $131 million. Among the problems cited, “a significant reduction in the level of purchases by one channel partner contributed to the decline in revenues.” Net debt stood at $5.47 billion at the end of the quarter, and all of […]
Houghton Mifflin Harcourt Buys Wiley’s Culinary and Reference Books
A sale has been announced for another big package of Wiley trade properties that have been on the market since March: Houghton Mifflin Harcourt has acquired all of Wiley’s culinary book assets, along with Webster’s New World Dictionary and CliffsNotes. The cookbook line includes Mark Bittman’s How to Cook Everything franchise and books from authors such as authors such as Rose Levy Beranbaum, Marcus Samuelsson and Ellie Krieger, along with the Betty Crocker series, a Better Homes and Gardens line licensed from Meredith Corporation. Along with the books themselves, Wiley publisher Natalie Chapman will join HMH to overse the entire […]
Quarto Dissidents Were Helped By Options Purchase; Leaver Calls for Unity
There’s at least one additional clue to what tipped the scales in the Quarto shareholder vote that removed Laurence Orbach from the board Wednesday: Harwood Capital, representing the leading dissident shareholders, indicated in a November 6 regulatory filing that they acquired over 2 million options on Quarto’s stock, expiring next month, that conveyed voting rights on an additional 10 percent of shares–giving their group 29 percent of the votes. Additionally, former partner Robert Morley–thought to be voting with Orbach and the board–switched positions and built up his own stake, helping to give the dissidents almost 55 percent of shareholder votes. New […]
Orbach Is Ousted from Quarto In Shareholder Vote
At this afternoon’s special shareholder meeting of The Quarto Group in London, company founder and longtime chairman and ceo (as well as 14% shareholder) Laurence Orbach was removed as a director of the company and replaced with Aurum Press founder Tim Chadwick. Quarto’s very lightly-traded shares closed up 2.5 percent in London this afternoon, on volume of just two thousand shares.
Apollo Is the Last Bidder Standing for McGraw-Hill Education
McGraw-Hill’s exploration of a sale of their education publishing division is down to one final bidder, Apollo Global Management, which has been tipped as interested since the sale process began earlier this year. But press account continue to give an exaggerated depiction of the process. Apollo is the last bidder left and, as sources have indicated to us for some time, is bidding less than McGraw-Hill wanted, at something under $2.5 billion. Which only makes sense, since McGraw-Hill’s own SEC documents describing to shareholders what an indepedent Education company would look like listed $2.455 billion in assets, and an anticipated […]