McGraw-Hill Splits Into Two Companies

By Frank Yu
Frank Yu
Frank Yu
September 12, 2011 Updated: October 1, 2015
Pedestrians walk by the McGraw-Hill headquarters on September 12, 2011 in New York City. (Justin Sullivan/Getty Images)
Pedestrians walk by the McGraw-Hill headquarters on September 12, 2011 in New York City. (Justin Sullivan/Getty Images)

NEW YORK—Conglomerate McGraw-Hill Companies Inc. on Monday said that it would split into two separate publicly listed companies to improve shareholder value.

The move follows demands earlier this year from several large shareholders to unlock greater shareholder value by splitting the company into separate pieces. 

Essentially, the company will transform into two companies, McGraw-Hill Markets, which will include the financial data and credit rating company Standard & Poor’s and market research firm J.D. Power & Associates, and McGraw-Hill Education, which is the second largest education publishing company in the world. The education arm will continue to focus its product line for K-12 education, higher and professional education, and digital learning.

“We are establishing two cohesive, high-performing operating companies that are structured to meet customer needs and positioned for sustainable growth and shareholder value creation in rapidly evolving global markets,” said company Chairman Terry McGraw III in a statement Monday.

The names for the two companies are still tentative and subject to change. The markets company will be more profitable and serve mainly corporate clients, while the education company will mainly serve education and not-for-profit customers.

Current shareholders have long argued that the sum value of McGraw-Hill’s individual divisions is greater than its whole, and had petitioned management to look into breaking the company apart so the separate pieces can have their own management and cost structure.

Investors cheered the news, sending shares of McGraw-Hill (NYSE: MHP) higher by 3.9 percent on Monday trading.

Frank Yu