Tommy Lee, Bain acquire Houghton Mifflin

Boston-based private equity houses Thomas H Lee Partners and Bain Capital have agreed to pay $1.66bn (E1.7bn) for Houghton Mifflin, the US educational publishing business of Vivendi Universal, also based in Boston.

The $1.66bn price is in line with Vivendi expectations, although it falls some way short of the $2.2bn paid by Vivendi for the business early last year, which included $500m of debt.

The final bidding group was smaller than the four-firm consortium that entered into exclusivity with Vivendi last week. Both Apax and Blackstone Partners have not proceeded with the transactions for reasons that as yet remain unclear. The consortium bidding for Vivendi’s European and US publishing assets combined had originally comprised six firms, including PAI Management and KKR.

Since the beginning of July, Vivendi has sold assets exceeding $5bn, including Italian digital television arm Telepiu, European publishing assets Vivendi Universal Publishing recently sold to a private equity bid fronted by French publisher Lagardère, encryption software editor Canal Plus Technologies, and Internet portal Vizzavi.

Vivendi has also announced that it has appointed bankers to advise it on plans to sell half its remaining 40 per cent stake in its former water and waste management subsidiary, Vivendi Environnement. According to Vivendi, the deals will bring the amount it has raised from asset disposals to some E7bn by the end of this year and E16bn by the end of 2003.