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Platinum Equity goes old school with latest deals

3 minute read

Books are displayed at the annual Paris book fair March 14, 2008. REUTERS/Charles Platiau

NEW YORK, June 16 (Reuters Breakingviews) - Platinum Equity is reaching in the archives to better digitize. On Tuesday, Tom Gores’ private equity firm said it would acquire textbook company McGraw Hill for $4.5 billion from Apollo Global Management (APO.N). Last week Platinum struck a deal for a controlling stake in SVP-Singer, the manufacturer of the iconic sewing machine. Both companies, with roots dating back a century ago, are seeing a resurgence.

McGraw Hill, founded in 1888, has in recent years been delivering digital products, which account for more than $1 billion in revenue or about 60% of the top line. If anything, the last year of virtual education will mean a greater demand for online learning. The pandemic also brought a spike in the need for sewing machines as people whipped up masks and indulged in homebound hobbies. The global industrial sewing machine sector is expected to grow to $5.6 billion in 2026 from about $4 billion in 2018, according to Fortune Business Insights.

Whether they can both sustain leverage and pay out huge returns through the next several years remains to be seen. For now, old school industries might be a smart bet. (By Jennifer Saba)

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