Cengage Learning

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Company Website

Location

Stamford, CT, USA

Financial Information

Mergers and Acquisitions

Pre-Cengage Acquisitions

  • Aplia Inc. (2007)
    On Feburary 20, 2007, "Thomson Learning Inc. [...] announced that it is to acquire Aplia Inc., the California-based educational software developer" (Source: ORBIS).

Thomson Learning to Cengage Acquisition

On October 25, 2006, "The Thomson Corporation [...] announced [...] the company intends to sell its Thomson Learning businesses in three independent sales processes. The company is to sell its higher education, careers and library reference business via a competitive bidding process in the first quarter of 2007. The other two businesses to be sold are corporate education and training services NETg and testing and assessment services Prometric." (Source: ORBIS)

By May 11, 2007, "Apax Partners and Omers Capital [...] agreed to acquire Thomson Learning's assets for around USD 7.75 billion. The assets include Wadsworth, Delmar Learning, Gale, Heinle, Brooks/Cole, South-Western and Nelson Canada. The latter will be majority owned by OMERS." (Source: ORBIS) On July 5, 2007, the transaction was completed for approximately USD 7.75 billion.

Cengage Learning Acquisitions

  • Houghton Mifflin Company's College Division (old website) (2008)
    On December 3, 2007, "Cengage Learning [...] agreed to acquire Houghton Mifflin Company's College Division". On May 28, 2008, "the Department of Justice announced that [...] Cengage will be required to divest assets relating to textbooks and educational material in 14 college level courses, to prevent an increase in textbook prices or a decrease in quality of publishing" resulting from the deal. The Antitrust Division also filed a lawsuit to block the deal; "assets will be divested to an Antitrust Division approved publisher". On June 2, 2008, the sale was completed. "The previously announced request for the divestiture of textbooks and other material by The Department of Justice will not affect Houghton Mifflin Harcourt's programs for the K-12 marketplace. A long-term agreement has been entered into between Houghton Mifflin Harcourt and Cengage whereby Houghton Mifflin Harcourt has exclusive distribution rights to leading titles from both Houghton Mifflin Harcourt and Cengage to high schools in the US." (Source: ORBIS)

Product Divisions

  • K-12: yes
  • Higher-education: yes

Summary

"Thomson Learning Inc. [now Cengage Learning], headquartered in Stamford, Connecticut, is one of the world's largest providers of print and digital information services for the educational and library reference markets. The company was established in 1994 as International Thomson Publishing Inc. It is comprised of some of the best businesses in the publishing, learning, and information industries. Thomson Learning's businesses and brands serve the needs of individuals, learning institutions, corporations and government agencies with products and services for both traditional and distributed learning." (Source: Orbis)

The acquisition of Houghton Mifflin's College Division expanded the range of textbooks Cengage offers. However Cengage will lose about $15 million in annual revenue from a mix of Cengage and Houghton titles, many in foreign languages and history survey courses, since it "agreed to divest textbooks and associated materials for 14 college-level courses to gain regulatory clearance from the U.S. Department of Justice for the acquisition" (Mickey and Meaney 2008, 158). "Under a long-term agreement forged as part of the acquisition agreement, Houghton Mifflin Harcourt is distributing an expanded list of titles from both companies to the high school market" (ibid.), particularly for Advanced Placement and honors courses.

Cengage's three operating units: Academic & Professional, Library/Reference (Gale) and International.

Brands

Cengage's major imprints include: Gale, Heinle, Wadsworth, Delmar Learning, Brooks/Cole, Course Technology and South-Western.

Business Strategy

"[T]he company is focusing on driving growth in four main areas: custom publishing, digital solutions, English-language training, and the Education Direct businesses in Australia and the U.K." (Mickey and Meaney 2008, 159)

Digital Solutions

"In terms of its digital products, Cengage is promoting a smaller number in order to increase penetration in the market. One of the products receiving focus is Aplia, the Web-based homework and assessment tool the company acquired in February 2007. Since its launch in 2002, the Aplia tool, which typically is paired with a textbook, has been most widely used in economics. Cengage is continuing to expand its use into other disciplines, including business, accounting and finance. In May 2008, Aplia released Grade It Now, which combines the instant feedback feature with graded homework assignments." (Mickey and Meaney 2008, 159)

"Cengage also is focused on growing CengageNOW, its online learning and teaching platform, which attracted 600,000 users between spring 2007 and spring 2008. Online quizzing through the system increased 31% in the year." (Mickey and Meaney 2008, 159)

Lightweight Textbooks

"Following the success of the company’s MKTG marketing textbook, a smaller, paper- back and less expensive student-centered text, 15 similarly formatted titles are planned for the 4LTR Press imprint. Cengage plans to have eight of the titles ready for fall 2008 and the rest on the market by February 2009. Registration for 4LTR Press books is the highest for any titles published by Cengage, while the books also show return rates at less than half those of other titles." (Mickey and Meaney 2008, 160)

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