Monday, March 21, 2022

Media Week (Vol 10, No 1) Pearson Offer, Textbook Oligarchy, B&Ned, Wiley, Scholastic Results, HMH Acquired, Designing with Books +More

Pearson receives unsolicited offer to take the company private.

The company confirmed they received more than one offer to acquire the company since November and indications are that there is now an unofficial bidding war going on among several PE groups.  In the most recent bid, Apollo Management valued the company at approximately £6.5billion (£8.5.share). (Thisismoney).  Thusfar, the Pearson board has rejected these bids on the pretext that they significantly undervalue the company as a whole.

It seems likely a deal will be done and it's only a matter of what price they settle on. Here at PND we'd anticipate a price around £8billion which equates to around £10.00/share. (Note: Share chart in US$)

 +The Guardian

Also recently, Pearson paid $140MM for Credly a company they already had a 20% stake in.  Credly is a platform which provides digital workforce credentialing. (ZDNet)

Via the Arizona State campus newspaper a well argued analysis of the influence of large publishing on campus. They call it the "textbook industrial complex":

College course materials are still expensive and proprietary, but their price tags are less visible than ever before. Against the backdrop of a digital revolution in education, the largest publishers have found a way to quietly maintain their dominance of the curriculum market.

Instead of opportunistically jacking up consumer textbook prices like they may have in the past, companies like Pearson and Cengage are tapping directly into the tuition revenue streams of colleges themselves.

By contracting out a broad new range of services — including software management, curriculum design, student recruitment and marketing — publishers underwent a radical business model transformation by having a direct stake in student enrollment and how much they pay in tuition.

Woes continue at B&N Education which showed some improvement over COVID year 2021 but still not a strong performance for 2022 (Press Release):

The Company’s fiscal 2022 third quarter results continued to be affected by the ongoing effects of COVID-19 and the Omicron variant which impacted students return to campus and on-campus activities. While the majority of the Company’s institutional partners brought students back to campus in early January, some chose to conduct classes remotely for the beginning of the semester, while other schools chose to delay their start dates, and some chose to both delay their start dates and begin the semester with remote learning.
Financial highlights for the Third Quarter 2022:
Consolidated third quarter GAAP sales of $402.8 million decreased 2.1%, as compared to the prior year period.
Consolidated third quarter GAAP gross profit of $87.0 million increased 23.2%, as compared to the prior year period.
Consolidated third quarter GAAP net loss of $(36.8) million, compared to a net loss of $(48.3) million in the prior year period.
Consolidated third quarter non-GAAP Adjusted Earnings of $(28.9) million, compared to $(25.6) million in the prior year period.
Consolidated third quarter non-GAAP Adjusted EBITDA of $(13.1) million, compared to $(20.8) million in the prior year period.

 John Wiley reported Q3 2022 results (Press Release):


  • GAAP Results: Revenue of $516 million (+7%), Operating Income of $46 million (+34%), and EPS of $0.63 (+62%)
  • Adjusted Results (at constant currency): Revenue of $516 million (+7%), Adjusted EBITDA of $100 million (-5%), and Adjusted EPS of $0.95 (-9%)


  • GAAP Results: Revenue of $1,537 million (+9%), Operating Income of $161 million (+20%), EPS of $1.86 (-2%), Cash Provided by Operating Activities of $158 million (+2%)
  • Adjusted Results (at constant currency): Revenue of $1,537 million (+8%), Adjusted EBITDA of $322 million (+4%), Adjusted EPS of $3.09 (+4%), Free Cash Flow of $77 million (-3%)

Scholastic reported Q3 (Press Release)

Peter Warwick, President and Chief Executive Officer, said, “Strong demand for our products resulted in a 24% increase in revenues in the third quarter with the biggest impact coming from higher than expected revenue per fair from book fairs, where fair count continues to approximate 70% of pre-pandemic levels. As parents and teachers around the world seek to close the learning gaps created by the disruption of in-person learning, demand for our proven educational products is getting stronger. Whether it’s from our core Trade backlist titles, GraphixTM series, engaging educational materials or the exciting way we deliver book fairs to schools, our loyal customers are turning to Scholastic to reinforce the love of reading in children."

“We are looking forward to a strong and successful fourth quarter which will include the spring book fair season for U.S. schools and the start of the peak selling season for Education Solutions. The enduring strength of the Scholastic brand and our iconic book properties also continue to drive interest from top tier production and entertainment companies. We are particularly excited about the upcoming April theatrical release of The Bad GuysTM movie from Dreamworks® and our live action Goosebumps® series which was greenlit for Disney+TM."

"Operationally, we expect to maintain our strong margins through the current fiscal year. In addition to the benefit of previous cost savings initiatives, we will continue to take steps to mitigate risks associated with inflationary cost pressures, supply chain challenges and higher oil prices.”

Veritas Capital has entered a purchase agreement for Houghton Mifflin Harcourt valued at $2.8B (THE)

Houghton Mifflin Harcourt Co., a provider of K–12 core curriculum, supplemental and intervention solutions, and professional learning services, today announced it is being acquired by private investment firm Veritas Capital in a deal valued at $2.8 billion.

Executives at HMH — which serves more than 50 million students and 4 million educators in 150 countries — said in a news release that the acquisition will allow the company to grow its product offerings and reach more students and educators globally. HMH also is parent company to professional development and leadership consultancy the International Center for Leadership in Education and Heinemann, a publisher of professional resources for teachers.

The agreement calls for HMH shareholders to receive $21 in cash per share, representing a 36% premium to the company's share price as of January 13, 2022

 Designing with books: It's all about the color combos (WAPO)

Want 10 feet of purple-spined, 10-inch-tall books that have never been opened? How about 100 feet of red, orange, yellow, green, blue and violet books to make your shelves look like a rainbow flag? It’s doable — and it’s been done.

What can those great works of literature teach us?  Inside Higher Ed

Robert F. Barsky, an astute legal scholar and linguist whose research combines a focus on social justice, human rights and border and refugee studies, argues in his recent book, Clamouring for Legal Protection, that public understanding of the issues surrounding refugees and asylum can benefit greatly from the study of great works of literature. His book examines a host of classic and canonical texts—from The Odyssey, The Aeneid, The Divine Comedy, Paradise Lost and Faust to Oroonoko, Frankenstein, Alice in Wonderland and the works of Kafka—that speak to issues involving displacement, persecution, exile, marginalization and xenophobia.

In grade school I once tried to map the escape journey of someone from a Chinese gulag. These people take it to a much deeper level (Guardian)

Exploring this tension, while also charting the ways that the relationship between maps and literature has changed through eras and genres, the Huntington’s new exhibit Mapping Fiction brings together literary maps from hundreds of years of literary history. Drawing from the Huntington’s archives of rare literary texts, the exhibition goes back to the early days of modern literature with texts like The Pilgrim’s Progress and Journey to the Center of the Earth (not Jules Verne’s version but rather a 1741 book written by Norwegian writer Ludvig Holberg), continuing up to the contemporary era with mappings of Octavia Butler’s life and works and artist David Lilburn’s 2006 mapping of James Joyce’s Ulysses.
Nothing to do with publishing but I found this article about the sharing economy fascinating (Economist)

The very thought that an item might be rented out or resold in the future changes how consumers approach buying it in the first place. Ms Wainwright of The RealReal says that most of its users regularly shop at posh department stores. Its proprietary surveys find that they “are starting to check The RealReal first to see how a luxury item retains value on the secondary market before making primary market purchases”. That is, they are more likely to buy high-quality garments, knowing that at least part of the cost may be recouped.

The biggest shift in perception, however, is not among people who sell or rent their clothing, but at the other end of the deal. A poll in 2016 by GlobalData found that 45% of adults had bought second-hand clothing, or said they would consider doing so. That share is now 86%. Influencers document trips to charity shops and show off their purchases. A decade ago wearing second-hand clothes was uncool, and teens hung out in Abercrombie & Fitch or Jack Wills. Stroll a hipster neighbourhood today—Williamsburg in Brooklyn, say—and passers-by will have bought their outfits in thrift stores like Goodwill and Housing Works, or curated shops like Awoke Vintage.

 Research from Pew indicates that 3 in 10 Americans now read eBooks (Pew)

Overall, 75% of U.S. adults say they have read a book in the past 12 months in any format, whether completely or part way through, a figure that has remained largely unchanged since 2011, according to a Pew Research Center survey conducted from Jan. 25 to Feb. 8, 2021. Print books remain the most popular format for reading, with 65% of adults saying that they have read a print book in the past year.

More from my Flipboard magazine

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