Educational software publisher Riverdeep agreed to buy US textbook publisher Houghton Mifflin for about $1.75 billion in cash and the assumption of about $1.61 billion in net debt, the companies said today.
As part of the deal, Riverdeep is being acquired by HM Rivergroup Plc in a share-for-share deal valuing Riverdeep at about $1.2 billion including net debt. Rivergroup's executive chairman Barry O'Callahan already controls Riverdeep.
French media group Vivendi sold Houghton Mifflin to private equity groups in 2002 for €1.7 billion - around €500 million less than it originally paid for it.
Founded in 1995, Riverdeep is behind popular educational software brands Reader Rabbit, Carmen Sandiego and Cluefinders.
Its flagship product is Destination Success, which encompasses mathematics and reading courses for many ages.
The deal brings together players in both the traditional and interactive media industries, giving Houghton Mifflin some technological firepower as the industry shifts to electronic media.