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OFFON

HOUGHTON MIFFLIN HARCOURT COMPANY

(HMHC)
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HOUGHTON MIFFLIN HARCOURT CO : Completion of Acquisition or Disposition of Assets, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)

05/13/2021 | 04:18pm EDT

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, 2021.

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.


                                       2

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(d) Exhibits.




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,
              2018.

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
              document)

†             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.


                                       3

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