Cengage Learning is among the companies that have put in initial bids for McGraw-Hill Companies' education business, according to a Reuters report. Other interested parties include Bain Capital, Thomas H Lee Partners and Apollo Global Management.
Reuters reported that the business, the world's second largest education company, could be valued by sales at around $3bn.
In a conference call with analysts last week, McGraw-Hill chief financial officer Jack Callahan said that the company was evaluating other options to a spin-off of the textbook business, including a potential sale.
McGraw-Hill announced last September that it would split into two publicly traded companies, McGraw-Hill Financial and McGraw-Hill Education, following calls from minority shareholders for the business to restructure.
Reuters also reported that Cengage was considering a bid for online education services company, EmbanetCompass. In a credit note last month, Standard & Poor described Cengage's financial risk profile as "highly leveraged" and said the company had "less than adequate" sources of liquidity to more than cover its needs over the next 12 to 18 months, with sources suggesting this might drive Cengage to consider acquisitions to boost cash flow.
Cengage c.e.o. Ron Dunn said: "It wouldn't be appropriate for us to comment on what McGraw-Hill might or might not do with respect to a sale or spin-off of its education business. With regard to Cengage Learning, we continue to generate strong cash flows from operations and we are very confident that we can service our debt while continuing to fund our business at appropriate levels as we lead the migration to digital solutions in all our markets."