Houghton Mifflin Harcourt Company (HMH)
(,
HOH-tən)
is an American publisher of textbooks, instructional technology materials, assessments, and reference works. The company is based in the Boston Financial District. It was formerly known as the Houghton Mifflin Company, but it changed its name following the 2007 acquisition of Harcourt Publishing. Before March 2010, it was a subsidiary of Education Media and Publishing Group Limited, an Irish-owned holding company registered in the Cayman Islands and formerly known as Riverdeep. In 2022, it was acquired by Veritas Capital, a New York–based private-equity firm.
Contents
History
In 1832, William Ticknor and John Allen purchased a bookselling business in Boston and began publishing themselves; James T. Fields joined as a partner in 1843 and would go on to publish works by Ralph Waldo Emerson, Nathaniel Hawthorne, and Henry David Thoreau. They formed a close relationship with Riverside Press, a Boston printing company owned by Henry Oscar Houghton. Houghton also founded his own publishing company, Hurd and Houghton, with partner Richard M. Hurd in 1864, with George H. Mifflin joining the partnership in 1872.
In 1878, Ticknor and Fields, now under the leadership of James R. Osgood, found itself in financial difficulties and merged its operations with Hurd and Houghton. The new partnership, named Houghton, Osgood and Company, and based in Boston's Winthrop Square, held the rights to the literary works of both publishers. When Osgood left the firm two years later, the business reemerged as Houghton, Mifflin and Company. Despite a financially successful partnership with Lawson Valentine, Houghton, Mifflin and Company retained debt it had inherited from Ticknor and Fields. In 1884, James D. Hurd, the son of Melancthon Hurd, became a partner. In 1888, the firm added James Murray Kay, Thurlow Weed Barnes, and Henry Oscar Houghton Jr.
Incorporation and expansion (1891–2000)
In 1891, the company established an educational division. The firm incorporated in 1908 and changed its name to Houghton Mifflin Company.
In 1916, Houghton Mifflin began publishing standardized tests, working with ACT creator Everett Franklin Lindquist. By 1921, the company was the fourth-largest educational publisher in the United States.
In 1961, Alfred A. Knopf published the first volume of Julia Child, Simone Beck, and Louisette Bertholle's Mastering the Art of French Cooking, after Houghton Mifflin rejected the manuscript. The book had sold close to 300,000 copies by 1966, according to Time. Houghton Mifflin's rejection of the manuscript was later dramatized in the 2009 film Julie & Julia.
In 1967, Houghton Mifflin became a publicly traded company on the New York Stock Exchange under the stock symbol "HTN."
In 1979, Houghton Mifflin acquired the catalog of Parnassus Press, a Berkeley, California small press, established in 1957 by Herman Schein, the husband of writer-illustrator Ruth Robbins. Works by authors included: Ursula K. Le Guin, Theodora Kroeber, Nicolas Sidjakov, Edward Ormondroyd, Charlotte Zolotow, Anne B. Fisher, Allen Say, Beverly Cleary, Crawford Kilian, Adrien Stoutenburg, and Sam DeWitt. In 1979, Houghton Mifflin acquired Clarion Books, the children's division of Seabury Press. In 1980, Houghton Mifflin acquired the educational publishing operations of Rand McNally.
Under Nader F. Darehshori, Houghton Mifflin acquired educational publisher McDougal Littell in 1994, for $138 million, and in 1995 acquired D.C. Heath and Company, a publisher of supplemental educational resources. In 1995, it acquired Chapters Publishing, a publisher focused on cooking, gardening, and crafts. In 1996, Houghton Mifflin created their Great Source Education Group to combine the supplemental material product lines of their school division, McDougal Littell, and Heath.
In 1998, HMH announced a sub-brand called LOGAL Software, which was to release a new line of interactive science software called Science Gateways, to support the United States curriculum.
Harcourt merger (2001–2007)
In 2001, Houghton Mifflin was acquired by French media giant Vivendi Universal for $2.2 billion, including assumed debt. Vivendi Universal already owned the British children's publisher Kingfisher, which later became an imprint of Houghton Mifflin. In 2002, facing mounting financial and legal pressures, Vivendi sold Houghton to private equity investors Thomas H. Lee Partners, Bain Capital, and Blackstone Group for $1.66 billion, including assumed debt (approximately 25% less than Vivendi had paid a year earlier).
On December 22, 2006, it was announced that Riverdeep PLC had completed its acquisition of Houghton Mifflin. The new joint enterprise would be called the Houghton Mifflin Riverdeep Group. Riverdeep paid $1.75 billion in cash and assumed $1.61 billion in debt from the private investment firms Thomas H. Lee Partners, Bain Capital, and Blackstone Group. Tony Lucki, a former non-executive director of Riverdeep, remained in his position as the company's chief executive officer until April 2009.
Houghton Mifflin sold its professional testing unit, Promissor, to Pearson plc in 2006. The company combined its remaining assessment products within Riverside Publishing, including San Francisco-based Edusoft.
On July 16, 2007, Houghton Mifflin Riverdeep announced that it signed a definitive agreement to acquire the Harcourt's education and trade divisions, and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion. The expanded company would become Houghton Mifflin Harcourt. McDougal Littell was merged with Harcourt's Holt, Rinehart & Winston to form Holt McDougal.
In October 2007, Houghton Mifflin sold Kingfisher to Macmillan Publishers.
On December 3, 2007, Cengage Learning (formerly Thomson Learning) announced that it had agreed to acquire the assets of the Houghton Mifflin College Division for $750 million, pending regulatory approval.
Recent history (2008–present)
On November 25, 2008, Houghton Mifflin Harcourt announced a temporary freeze on the acquisition of new trade division titles, allegedly in response to the 2008 financial crisis. The publisher of the trade division resigned, apparently in protest. Many observers familiar with the publishing industry saw the move as a devastating blunder.
Harcourt Religion was sold to Our Sunday Visitor in 2009.
On July 27, 2009, the Irish Independent newspaper reported that Houghton Mifflin Harcourt's controlling shareholder EMPG was in the process of restructuring negotiations with its unsecured-debt holders that would lead to the conversion of the debt into equity. The news story reported that the unsecured debt holders would receive a 45% equity stake. As a result, the royal family of Dubai via their Istithmar World Capital investment vehicle became major stakeholders. Estimates were that EMPG would cut its debt from $7.3bn to $6.1bn. On August 15, 2009, the Financial Times reported in an interview with Houghton Mifflin Harcourt's CEO at the time, Barry O'Callaghan, that the refinancing had received approval from more than 90% of lenders. The terms included the holding company debt converting into 45% of the fully diluted common equity, an effective 25 percent relaxation of financial covenants, second lien lenders agreeing to convert their holdings into a PIK instrument, reducing annual interest costs by $100m, and a further $50m increase its working capital facility.
The company confirmed a further restructuring of Houghton Mifflin Harcourt's debts on January 13, 2010. The proposed restructuring materially impacted the shareholders of EMPG, the former holding company of Houghton Mifflin Harcourt.
On February 22, 2010, Houghton Mifflin Harcourt announced that EMPG and HMH had reached an agreement to restructure the company's finances and recapitalize its balance sheet with a substantial infusion of fresh cash from institutional investors.
The agreement, supported by 100% of HMH's creditors, highlighted a reduction in the senior debt to $3 billion from the current $5 billion, with new equity issued to the senior debt holders (including Paulson & Co. and Guggenheim Partners), conversion of the $2 billion mezzanine debt into equity and warrant, receipt of $650m of new cash from the sale of new equity. In addition to the key highlights, HMH announced its $100 million Innovation Fund to invest in the next generation of technology for the education industry.
Leadership changes
On September 22, 2016, Zecher resigned from HMH and was replaced by Interim CEO and Board Member L. Gordon Crovitz. Crovitz is a former publisher of the Wall Street Journal. On February 15, 2017, John J. "Jack" Lynch Jr., the former CEO of Renaissance Learning, was named the new CEO of HMH.
Lynch brought former employee Jim O'Neill back to the company to lead the core division as GM and EVP.
Catalog
HMH is also formerly home to media brands like Carmen Sandiego and The Oregon Trail; and brands including The Whole30; The Best American Series; The American Heritage and Webster's New World Dictionaries; Better Homes and Gardens; How to Cook Everything; the Peterson Field Guides; CliffsNotes; and many children's books, including the Curious George series and The Little Prince; as well as publishing the works of J. R. R. Tolkien for United States distribution.
Some other notable books include:
The Handmaid's Tale, Margaret Atwood (1987) (E-book version)
Houghton Mifflin Interactive
Houghton Mifflin Interactive was a wholly owned subsidiary of Houghton Mifflin Company that published titles including Inventor Labs.