McGraw-Hill to Split Into Two Companies

Posted on September 12, 2011

McGraw-Hill announced a major change at the company. McGraw-Hill will be split into two separate companies as part of the Board of Directors' three-part "Growth and Value Plan."

McGraw-Hill Education will handle education services and digital learning. McGraw-Hill Markets will focus on its capital and commodities markets. Here is the company's description of the two new entities:

McGraw-Hill Markets, the working name for this Company, will include the following iconic brands in the capital and commodities markets: Standard & Poor's, the world's foremost provider of credit ratings; S&P Indices, the world's leading index business; the newly launched S&P Capital IQ, a leading global provider of multi-asset class data, research, benchmarks and analytics; and Platts, the leading global provider of information and indices in energy, petrochemicals and metals. Combined, the capital and commodities businesses account for approximately 90% of McGraw-Hill Market's annual revenues.

McGraw-Hill Education expects revenues of approximately $2.4 billion in 2011. As an independent education company, it will be able to optimize its solid cash generation capabilities and strong balance sheet to pursue accelerated growth strategies and augment its organic growth with digital services and/or via acquisitions or strategic partnerships. For example, it will have greater flexibility to develop and deploy new products and services to address secular trends toward digital education platforms and to pursue higher-margin opportunities in educational services such as online instructional and school digital services. Internationally, the company will be better positioned to capitalize on education spending and adult skills training in China, India, Brazil and other emerging markets, which are projected to continue to grow at double-digit rates.

In this video Terry McGraw, the Chairman, President and CEO explains the three part strategy: