McGraw-Hill Education

Private Equity Manager (GP)

Case study

About the company

McGraw-Hill Education (“MHE”) is a leading global provider of education materials and learning solutions for students in the university K-12 and professional learning markets. The company’s products include print and digital textbooks, digital learning solutions, and customised education products.

Investment Rationale

• Primary buyout effects and potential cost savings, as a result of carving out MHE from McGraw-Hill Companies to form a standalone business.
• MHE had invested heavily to position itself with a competitive advantage in digital solutions, a high growth market.
• Strong free cash flow profile as the company benefited from positive working capital and modest capex requirements.
• Opportunity for consolidation with one of the other major players in the education industry, Cengage.

Our relationship

PIP is a primary investor in two Apollo Management (“Apollo”) funds and has acquired a secondary interest in an Apollo fund. In addition, PIP has participated in five co-investments alongside the manager. Pantheon also holds three advisory board seats with the manager.

Active management and value creation

• Significant further investment in digital products.
• Completion and integration of six digital-focused acquisitions.
• Turnaround of MHE’s K-12 and International businesses .
• Implementation of cost-saving actions.

Exit

MHE was acquired by Platinum Equity in August 2021, providing a full exit for Apollo and for PIP.