Riverdeep, a small Irish educational software company, is in talks about an ambitious $3.5bn reverse takeover of Houghton Mifflin, one of the best known educational publishers in the US.

The combination of Riverdeep, a privately controlled company with an estimated value of $1bn-$1.5bn, with the fourth-largest educational publisher in the US would highlight the pace at which new software tools are transforming the traditional textbook market.