Veritas Capital Fund VII, L.P., managed by Veritas Capital Fund Management, L.L.C entered into an Agreement and Plan of Merger to acquire Houghton Mifflin Harcourt Company (NasdaqGS:HMHC) from Engine Capital, L.P., a fund managed by Engine Investments, LLC, and others for $2.7 billion on February 21, 2022. Under the Merger Agreement, the Purchaser will make a cash tender offer, as soon as practicable, and in any event within ten Business Days after the date of the Merger Agreement, to commence the Offer to purchase any and all outstanding shares of Company Common Stock. Pursuant to the terms of the agreement, HMH shareholders will be entitled to receive $21 in cash per share through a tender offer. The Offer initially will remain open for twenty business days, subject to possible extension on the terms set forth in the Merger Agreement. The tender offer commenced on March 7, 2022. Following the completion of the Offer, subject to the absence of injunctions or other legal restraints preventing the consummation thereof, the Purchaser will merge with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of the Parent, pursuant to the procedure provided for under Section 251(h) of the Delaware General Corporation Law, without any additional stockholder approvals. The Parent and the Purchaser have secured committed financing, consisting of a combination of equity to be provided by the Fund and committed debt financing, the aggregate proceeds of which will be sufficient for the Parent and the Purchaser to pay the aggregate Offer Price for the shares of Common Stock in the Offer and the Merger, and all related fees and expenses. Bank of America, JPMorgan Chase Bank, N.A., Deutsche Bank, Citizens Bank, N.A., Goldman Sachs, Mizuho Bank, Ltd., Stone Point Credit and Macquarie Capital are providing committed financing for the proposed transaction. The transaction will be financed with a $50 million draw on a new $250 million revolver, a $1,480 million first lien term loan, a $390 million second lien term loan, and $1,274 million in sponsor equity. Under the termination, the Houghton will be required to pay the Parent a termination fee of $65 million and the Veritas will be required to pay the Company a termination fee of $130 million. The Merger Agreement contains customary termination rights for both the Parent and the Purchaser, on the one hand, and the Company, on the other hand, including, among others, for failure to consummate the Offer on or before August 22, 2022.

Jack Lynch, President and Chief Executive Officer of HMH, who will continue to lead the Company along with the current management team. Offer is subject to customary closing conditions, including: (a) that the number of shares of Company Common Stock validly tendered and not validly withdrawn, together with any shares of Common Stock beneficially owned by the Parent or any subsidiary of the Parent, equals at least one share more than 50% of all shares of Common Stock then outstanding (the “Minimum Condition”) and that the waiting period (and any extensions thereof) and any approvals or clearances applicable to the Offer and Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired, been terminated or obtained; and also subject to receipt of requisite regulatory approvals and satisfaction of customary closing conditions. The agreement was unanimously approved by HMH's Board of Directors. As of March 28, 2022, approximately 1.8 million Houghton Shares had been validly tendered into and not validly withdrawn from the Offer, representing 0.6% of the outstanding Houghton Shares. The parties currently expect the Offer and the Merger to be completed in the second quarter of 2022. The offer will expire on April 1, 2022. As on March 29, 2022, Veritas Capital has extended the expiration date of the Offer until April 6, 2022, unless further extended.

Robert Katz of Latham & Watkins acted as legal advisor to Evercore Group L.L.C. who acted as financial advisor and fairness opinion provider, and Hal J. Leibowitz, Joseph B. Conahan, Susan Murley, Jonathan Wolfman, Justin Ochs, Scott Kilgore, Julie Hogan Rodgers, Ciara Baker, JC Minko, Nathan Moore, Douglas Burton, Paul Jakubowski, Jeff Johnson, Kirk Nahra, David Gold, Brett Jackson, Jana Douglas of Wilmer Cutler Pickering Hale and Dorr LLP served as legal counsel to HMH. Rick Presutti, Antonio Diaz-Albertini, Mike Shah and Max Goodman of Milbank LLP acted as legal advisor to Veritas. Computershare Trust Company, National Association acted as depository bank to Veritas. Okapi Partners LLC acted as information agent to Veritas. Cahill Gordon & Reindel LLP acted as legal advisor to Houghton Mifflin Harcourt Company in the transaction. Houghton has agreed to pay Evercore a fee currently estimated to be approximately $32 million, of which $1 million was paid upon delivery of Evercore's opinion, and the balance of which will be payable contingent upon consummation of the transaction.

Veritas Capital Fund VII, L.P., managed by Veritas Capital Fund Management, L.L.C completed the acquisition of Houghton Mifflin Harcourt Company (NasdaqGS:HMHC) from Engine Capital, L.P., a fund managed by Engine Investments, LLC, and others on April 6, 2022. As of the expiration of the tender offer, a total of 72.9 million shares were validly tendered into and not properly withdrawn from the offer, representing approximately 57% of HMH's outstanding shares and satisfying the minimum tender condition of the offer. As a result of the transaction, HMH's stock shall cease trading on the NASDAQ under the ticker symbol HMHC.