McGraw-Hill has begun holding talks with Apollo Global Management over a potential sale of its education unit, though any deal might yield less than expected, a person briefed on the matter said on Tuesday.
Apollo bested Apax Partners to become the preferred bidder for the education unit in recent weeks. But the person briefed on the matter cautioned that McGraw-Hill may ultimately choose not to pursue a sale and may instead spin off the division.
By separating the decision its education division, McGraw-Hill is moving to focus on its faster-growing financial data operations, which includes the rating agency Standard & Poor's and the energy and metals information service Platts.
Should McGraw-Hill choose to forge ahead on a deal with Apollo, a sale may yield less than $2.5 billion, lower than what the publishing company had initially hoped. That is because of weakening performance in the education division, which reported an 11 percent decline in third-qu arter revenue, to $836 million, from the same time last year.
Harold McGraw III, the company's chief executive, said earlier this month that the business unit has had to struggle against “the weakest Kâ€"12 market in a decade.â€
A spokeswoman for McGraw-Hill declined to comment.
News of McGraw-Hill's talks was first reported by The Wall Street Journal online.
