Houghton Mifflin Harcourt Shares Are Trading Higher On Selling Books & Media Segment To News Corp For $349M

Houghton Mifflin Harcourt Co HMHC inked an agreement to divest its consumer publishing business, HMH Books & Media, to News Corp NWSA division HarperCollins Publishers for $349 million cash.

• The divestiture will help HMH concentrate on K–12 education and drive digital sales, annual recurring revenue, free cash flow, and repay debt. HMH Books & Media generated $192 million in billings during 2020. The company will use the expected divestment proceeds of $337 million for debt repayment.
• HMHC reduced the 2021 billings expectations to a range of $905 million to $955 million from the previous range of $1.10 billion to $1.15 billion upon the divestment. The HMH Books & Media employees will join News Corp's trade publishing division HarperCollins under the arrangement.
• HMH Books & Media has published renowned novels, nonfiction, cookbooks, and children's books. It also includes innovative production company HMH Productions.
• Media and information services company News Corp recently acquired Investor's Business Daily from O'Neil Capital Management for $275 million.
• News Corp held cash and cash equivalents worth $1.6 billion as of December 31, 2020.
• Price action: HMHC shares traded higher by 23.8% at $7.40 in the premarket session on the last check Monday. NWSA share prices closed lower by 1.85% at $25.72 on Friday.