Houghton gets debt commitment from three banks for purchase of Reed Elsevier divisions

By Sara Rosenberg

New York, July 16 - Houghton Mifflin Co. has received a debt financing commitment to help fund its acquisition of the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier, according to a news release.

Credit Suisse, Lehman Brothers and Citigroup are the lead banks on the debt.

Under the agreement, Houghton is buying the businesses in a transaction valued at $4 billion, consisting of $3.7 billion in cash and $300 million of common stock of Houghton Mifflin Riverdeep Group plc, Houghton's parent company.

Existing investors, including J & E Davy, have committed to provide $235 million of new equity financing to support the transaction.

Completion of the transaction is expected in late 2007 or early 2008, subject to regulatory review.

Through the acquisition, Boston-based Houghton Mifflin said it will be a preeminent educational publisher well-positioned to meet the evolving needs of educators and students.

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