The Board of Directors of The McGraw-Hill Companies today announced that it had approved a move that would split the 123-year-old company into two new public companies: McGraw-Hill Markets and McGraw-Hill Education.
McGraw-Hill Markets will include such brands as Standard & Poor's, Platts, J.D. Power and Associates, as well as the construction and aerospace segments. This new company will start its life generating around $4 billion in annual revenue. Terry McGraw will serve as Chairman, President and CEO of the new company.
"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," Terry McGraw said in the company's announcement. "This will provide exciting opportunities for our employees who will be part of two great companies with rich histories and bright futures."
The move by McGraw-Hill was widely expected, though it did not involve the splitting out of Standard & Poor's, which was called for by many critics of the company following the controversial decision by S&P to downgrade U.S. bonds (a move not repeated by either Moody's or Fitch).
The move also leaves such publications as Engineering News-Record and Aviation Week further isolated with the company. At the time I joined McGraw-Hill in the early nineties, ENR was part of a fairly strong portfolio of print publications that included such titles as Business Week and Architectural Record. The current look of ENR, for instance, was modelled after a redesign of Business Week. But Business Week is now owned by Bloomberg, and ArchRecord recently lost its contract with the AIA to Hanley Wood's Architect magazine.
A few weeks ago, in an article concerning calls by some investor groups to split the company into four segments, the NYT' DealBook speculated that some magazine titles could be sold off – with fewer titles owned by McGraw-Hill, the specific titles are not hard to guess.
In June the company also announced that it had retained Morgan Stanley in order to pursue a divestiture of its Broadcasting Group. The group is fairly small by McGraw-Hill standards: about $100 million in size. It is mad up of ABC affiliates in Denver, San Diego, Bakersfield and Indianapolis, as well as Azteca America affiliates in Denver, Fort Collins, Colorado Springs, San Diego and Bakersfield.