July 24 Houghton Mifflin Harcourt, the textbook publisher that emerged from bankruptcy last year, is close to filing for an initial public offering that could come later this year, according to two sources familiar with the process.
The Boston-based company has hired Morgan Stanley, Goldman Sachs, Citigroup Inc, Credit Suisse and Wells Fargo & Co for an IPO that could raise around $250 million during the fourth quarter, these people said.
Houghton Mifflin, Goldman Sachs and Wells Fargo could not be reached for comment. Morgan Stanley, Citigroup and Credit Suisse declined to comment.
Houghton Mifflin hired law firm Paul, Weiss, Rifkind, Wharton & Garrison and Blackstone Group last year to help restructure about $3 billion in debt. The company emerged from bankruptcy in June 2012, giving its lenders and bondholders 100 percent equity in the company.
Paulson & Co, Apollo Management Holdings LP and Marc Lasry's Avenue Capital Group were among members of a creditor group that negotiated the reorganization.
The company's debt troubles began in 2006 when Dublin-based Education Media & Publishing Group Ltd borrowed heavily to buy Houghton Mifflin for $1.75 billion from buyout firms Thomas H. Lee Partners and Bain Capital. The company was later merged with Harcourt which Education Media & Publishing Group acquired from Reed Elsevier Plc for about $4 billion.
In February 2010, Houghton Mifflin recapitalized its balance sheet with $650 million of new equity capital.
Aside from its educational arm, Houghton Mifflin publishes the "Curious George" and J.R.R. Tolkien's "Lord of the Rings" book series, and games such as "Where in the World is Carmen Sandiego?"
Textbook publishers have struggled as more readers get information online. Some have tried to make headway into digital learning programs, but other factors have also hamstrung the industry, including spending reductions by state and local governments and the growth of the used book and book rental markets.
Earlier this month, Cengage Learning Inc, which bills itself as second-largest producer of course materials in U.S. higher education, filed for bankruptcy under the burden of nearly $6 billion in debt.