Rupert Murdoch’s News Corp. agreed to buy the consumer arm of educational publisher Houghton Mifflin Harcourt Co. for $349 million, the media company’s second publishing acquisition in less than a week.
News Corp. touted the addition of Houghton Mifflin’s extensive backlist of titles to the company’s HarperCollins publishing unit in a statement. “Backlists have proven to be a sustainable and growing source of revenues, high margins and cash flow for publishers, particularly evergreen properties with broad, enduring and global appeal,” News Corp. said.
For its part, Houghton Mifflin said the sale of its Books & Media unit would allow the remaining company to “focus singularly on K-12 education and accelerate growth momentum in digital sales, annual recurring revenue and free cash flow while paying down a significant portion of its debt.”
Houghton Mifflin’s shares soared 32% to $7.90 in premarket trading at 7:25 a.m. Monday in New York. They had risen about 80% this year through March 26, giving the Boston-based company a stock-market value of about $762 million.
Dow Jones reported Sunday that the deal was imminent.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. and IBD in providing financial data and information. News Corp. is the owner of Dow Jones & Co.