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A large group of private equity firms are lining up to bid for Thomson Corp.’s learning division, which it put up for sale early this year, according to sources familiar with the situation.
The bidders include a consortium made up of Bain Capital Management, Thomas H. Lee Partners, the Blackstone Group along with Bertelsmann, the privately-owned German media company; a second bidding group is made up of Providence Equity Partners, which is possibly teaming with one other investor, and has the learning division’s management’s on its side, according to the sources. The Carlyle Group and Kohlberg Kravis Roberts & Co. are bidding alone, the sources said. Providence’s partners in the bid could not be confirmed, but one of the sources said it is teaming up with Ontario Teachers Pension Plan, while another source said it is teaming up with Pearson.
Final bids are due sometime in late April to early May. Pearson would only be interested in acquiring a small part of Thomson’s learning division, the source added. Likewise, Bertelsmann’s role in the auction is a small one, according to the same source. The division, which is a leading textbook publisher, has Ebitda of around USD 550m. It’s being sold with a staple financing priced at 10 times Ebitda minus capital expenditures, according to one of the sources. It is unclear what the division’s capital expenditure is, but the price is expected to be around USD 5.5bn to USD 6bn.
Officials at Thomas H. Lee and Ontario Teachers Pension Plan did not return calls by press time; spokespersons for Bain, Providence, KKR and Carlyle also did not return calls by press time; John Ford, spokesman for Blackstone said the firm had no comment. Bertelsmann and Pearson could not be reached by press time. A spokesman for Thomson did not return calls. Thomson, the listed Canadian publishing company, announced in the fall that it retained Morgan Stanley to sell the division.
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