By Sam Boughedda
Investing.com -- Houghton Mifflin Harcourt Co (NASDAQ:HMHC), the learning technology company, is to be acquired by Veritas Capital in a deal worth $2.8 billion.
Private investment firm Veritas will acquire the company in cash for $21 per share, representing a 36% premium to the company's unaffected share price as of January 13, 2022.
After an initial fall in its share price during the pandemic, Houghton shares bounced back as the company benefitted from more people moving into remote learning. Its shares have gained 241% in the last 12 months, while they rallied 15% Tuesday on the acquisition news.
In its press release, the company said the move to accept the Veritas offer resulted from a strategic review process overseen by its Board of Directors. They held discussions with several potential buyers as part of the review process.
"With accelerating billings growth, strong free cash flow and a transformed cost structure, we are at an important inflection point, and the time is right to move into the next phase of our long-term growth strategy alongside a partner that brings significant industry expertise," said Jack Lynch, president and CEO of HMH.
Lynch will continue to lead the company along with the current management team. The transaction is expected to go through in the second quarter of 2022.