Houghton Mifflin Riverdeep details $1.82 billion credit facility ahead of Thursday launch

By Sara Rosenberg

New York, Nov. 28 - Houghton Mifflin Riverdeep Group plc (Riverdeep Interactive Learning Ltd.) came out with details on its proposed $1.82 billion credit facility as the deal is getting ready to launch with a bank meeting in New York on Thursday and in London on Dec. 4, according to a market source.

The facility consists of a $250 million six-year revolver and a $1.57 billion seven-year term loan B, with both tranches talked at Libor plus 275 basis points, the source said.

Credit Suisse and Citigroup are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to fund the acquisition of Houghton Mifflin Co., a Boston-based educational publisher, from Thomas H. Lee Partners, Bain Capital Partners, The Blackstone Group and management for $3.4 billion, including the assumption of $1.61 billion in net debt.

Technically, HM Rivergroup plc, a newly formed Irish public limited company, is acquiring Houghton Mifflin, concurrently acquiring Riverdeep and then merging the two companies together.

Riverdeep, a Dublin, Ireland, provider of CD-ROM and internet-based educational products for the K-12 market, is being acquired in a share-for-share exchange valuing it at $1.2 billion, including the assumption of net debt.

HM Rivergroup expects to complete the acquisitions of Houghton Mifflin and Riverdeep before the end of 2006, subject to limited conditions, including the receipt of customary regulatory approvals.

Following closing of the transactions, HM Rivergroup will change its name to Houghton Mifflin Riverdeep Group plc.

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