Pearson plc, the international media group, has signed the agreement by which it will sell on to Hicks, Muse, Tate and Furst Inc (Hicks Muse) the Reference and Business & Professional divisions of Simon & Schuster, which Pearson has agreed to acquire from Viacom Inc.
Under the terms of the contract, Hicks Muse is to acquire Simon & Schuster’s Reference and Business & Professional divisions in the United States for $860m in cash. Pearson will retain all of Simon & Schuster’s international Business & Professional divisions, including its European operations which specialise in technology and computer publishing and had revenues in 1997 of $43m.
In addition, Hicks Muse and Pearson will enter into an international distribution agreement, initially for five years, under which Hicks Muse will pay Pearson to distribute their products outside the United States. In 1997, revenues from this agreement would have been approximately $70m.
The agreement is conditional on the completion of Pearson’s acquisition from Viacom, for $4.6 bn, of Simon & Schuster’s Education, Reference and Business & Professional divisions. Pearson anticipates that the acquisition will be completed in the second half of 1998, subject to regulatory approvals, including the expiration of the Hart -Scott - Rodino waiting period in the US, and the consent of Pearson’s shareholders at an extraordinary general meeting. The shareholder circular convening the EGM, which will give further details of the Viacom and Hicks Muse transactions, will be distributed shortly.
On 18 May, Pearson announced that it had signed an agreement with Viacom for the purchase of Simon & Schuster’s Education, Reference and Business & Professional divisions for $4.6bn. The businesses that Pearson has agreed to sell to Hicks Muse, which is a leading US based private investment firm, had unaudited sales in the year ended 31 December 1997 of approximately $500m and made operating profits of some $50m. At 31 December 1997, these businesses had net assets of approximately $110m. The businesses are:
- Reference Publishing, which is Macmillan’s programme in computer, general and library reference materials. This list includes consumer, technical and professional computer titles and brands such as MacMillan, Cue, Sams, Fromer and Webster’s New World Dictionary.
- Business & Professional publishes "solutions" oriented books, periodicals and distance learning products for professionals with particular strengths in the areas of finance, healthcare, charities and business management.
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