Houghton Mifflin Harcourt (HMH) has struck an agreement to buy Scholastic's Educational Technology and Services business (EdTech) in a deal worth $575m.
HMH said the deal, which will be done in cash subject to working capital adjustments, would put the Boston-based company in "a leading position in intervention curriculum and services and extend its product offerings in key growth areas."
The deal will close in the second quarter of 2015 if given regulatory approval. HMH said it expected the deal would: "yield synergies in 2016 and beyond with annual cost savings of $10m to $20m".
EdTech's president Margery Mayer and 800 staff are "expected to remain with the business" following the acquisition.
Linda K Zecher, HMH president and c.e.o., said: "As HMH drives a learning transformation powered by technology, we believe the EdTech segment of Scholastic will strengthen our offering in both K-12 and other key growth areas, including digital intervention, early learning, consumer and professional development." She added: "We believe that by diversifying our education portfolio, we will be taking an important step toward optimizing our growth while also enhancing our resiliency throughout economic and market cycles."
EdTech provides digital curricula, products and services to schools in the US, as well as implementation and assessment services. For the financial year ending 31st May 2014, it saw net sales of $249, up 9% on the previous year's figures.