Item 2.01 Completion of Acquisition or Disposition of Assets.
On May 10, 2021, Houghton Mifflin Harcourt Publishing Company ("HMH Sub"), a
wholly owned subsidiary of Houghton Mifflin Harcourt Company (the "Company" and
together with HMH Sub, the "Sellers"), completed the previously announced sale
of all of the assets, including intellectual property, used primarily in its HMH
Books & Media business (the "Business") pursuant to the Asset Purchase
Agreement, dated March 26, 2021 (the "Agreement"), with HarperCollins Publishers
L.L.C. (the "Purchaser"), for cash consideration of approximately $349.0
million, with net proceeds estimated to be approximately $337 million, and the
Purchaser's assumption of all liabilities relating to the Business subject to
specified exceptions. The results of the Business were previously reported in
the Company's Books & Media segment, which has been classified as a discontinued
operation since March 26, 2021 and reflected in the Company's Quarterly Report
on Form 10-Q for the first quarter ended March 31, 2021, as filed on May 6,
The foregoing description is qualified in its entirety by reference to the
Agreement, a copy of which is filed as an exhibit to this filing. The Agreement
has been attached as an exhibit to this report to provide investors and security
holders with information regarding its terms. It is not intended to provide any
other factual information about HMH Sub, the Company or the Purchaser or any of
their respective subsidiaries or affiliates. The representations, warranties and
covenants contained in the Agreement were made only for the purposes of such
agreement and as of specified dates, were solely for the benefit of the parties
to such agreement, and may be subject to limitations agreed upon by the
contracting parties. The representations and warranties may have been made for
the purposes of allocating contractual risk between the parties to the agreement
instead of establishing these matters as facts, and may be subject to standards
of materiality applicable to the contracting parties that differ from those
applicable to investors. Investors are not third-party beneficiaries under the
Agreement and should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual state of facts or
condition of HMH Sub, the Company or the Purchaser or any of their respective
subsidiaries or affiliates. In addition, the assertions embodied in the
representations and warranties contained in the Agreement are qualified by
information in a confidential disclosure schedule that the parties have
exchanged. Accordingly, investors should not rely on the representations and
warranties as characterizations of the actual state of facts, since (i) they
were made only as of the date of such agreement or a prior, specified date, (ii)
in some cases they are subject to qualifications with respect to materiality,
knowledge and/or other matters and (iii) they may be modified in important part
by the underlying disclosure schedule. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Agreement, which subsequent information may or may not be fully reflected
in HMH Sub's, the Company's or the Purchaser's public disclosures.
The Company is also filing herewith certain pro forma financial information
related to the sale of the Business, which is attached hereto as Exhibit 99.1.
The Company classified the Business as held-for-sale in its consolidated balance
sheets and classified the related operating results, net of income tax, as
discontinued operations in its consolidated statements of operations in its
Quarterly Report on Form 10-Q for the first quarter ended March 31,
2021. Accordingly, the Company has not provided pro forma financial statements
as of March 31, 2021 in this Current Report on Form 8-K. As such, there are no
other pro forma adjustments necessary on the consolidated statements of
operations for the three months ended March 31, 2021.
Item 7.01 Regulation FD Disclosure
On May 10, 2021, the Company issued a press release entitled "Houghton Mifflin
Harcourt Completes Divestiture of HMH Books & Media for $349 Million". A copy of
the press release is furnished herewith as Exhibit 99.2 to this report.
Item 9.01. Financial Statements and Exhibits
(b) Pro Forma Financial Information.
The Unaudited Pro Forma Financial Statements of the Company reflecting the
Closing of the sale of the Business are filed as Exhibit 99.1 to this Current
Report on Form 8-K and incorporated herein by reference:
i. Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 2020.
ii. Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 2019.
iii. Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 2018.
Exhibit No. Description
2.1a† Asset Purchase Agreement, by and among Houghton Mifflin Harcourt
Publishing Company, HarperCollins Publishers LLC and News Corporation
(solely with respect to Section 7.10), dated as of March 26, 2021
(incorporated by reference from Exhibit 2.1 to the Company's Current
Report on Form 8-K filed on March 29, 2021).
99.1 Unaudited pro forma consolidated statement of operations for the
years ended December 31, 2020, December 31, 2019 and December 31,
99.2 Press release dated May 10, 2021 titled "Houghton Mifflin Harcourt
Completes Divestiture of HMH Books & Media for $349 Million"
104 Cover Page Interactive Data File (embedded within the Inline XBRL
† Schedules and similar attachments have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The registrant hereby undertakes to
furnish supplementary copies of any of the omitted schedules or similar
attachments upon request by the SEC.
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