New York—McGraw-Hill Cos. announced it plans to separate into two public entities: McGraw-Hill Markets and McGraw-Hill Education. The company, which has been under increasing public pressure from shareholders, said the move was intended to “accelerate growth and increase shareholder value.”
McGraw-Hill Markets will be made up of Standard & Poor's, Platts, J.D. Power and Associates, McGraw-Hill Construction and the Aviation Week brand. Harold “Terry” McGraw III, currently chairman and president-CEO of McGraw-Hill Cos., will hold the same title at McGraw-Hill Markets.
McGraw-Hill Education will become an independent business operating in the K-12, higher education and professional education markets. McGraw-Hill is searching for a CEO to run this business; Robert Bahash, currently president of McGraw-Hill's education business will continue in his role until a new CEO has been appointed.
“After thorough analysis, the board determined that the creation of these two independent companies is the best and most reliable way to generate superior shareholder value,” McGraw said in a statement.
In addition to the split, McGraw-Hill said it also plans to cut costs and to buy as much as $1 billion worth of its shares by the end of this year; the company has already reacquired $540 million of its shares so far this year.
The market reacted favorably to the announcement; McGraw-Hill's share price increased in early morning trading by 1.81% to $39.42.