Apax Partners

The number two US and global publisher of print and electronic higher education learning materials

Cengage Learning, formerly Thomson Learning, is the number two US and global publisher of print and electronic higher education learning materials as well as a leading provider of library reference materials through its Gale subsidiary.

Apax Partners had long been interested in the business due to its unique ability to provide valuable educational content to the growing number of university students and professional learners worldwide. Moreover, while Cengage Learning has traditionally focused on producing traditional print textbooks and reference materials, Apax Partners believed that the industry was in the early stages of a transition to digital learning solutions that would drive strong growth in the business for the foreseeable future.

To ensure Cengage Learning was properly positioned to take advantage of these trends, Apax Partners selected outside managers Ron Dunn (CEO) and Dave Shaffer (Chairman) to aid in due diligence and run the company after acquisition.

In February 2007, Thomson Corporation began the process of divesting Cengage Learning so it could focus on its core information services businesses. While Thomson approached a broad number of buyers for the business, Apax Partners was uniquely positioned to win the auction due to the deep insights into the business provided by Mr. Dunn and Mr. Shaffer.

Because of this industry knowledge, on May 11 2007 Apax Funds and OMERS announced that they had acquired Cengage Learning and its Canadian affiliate Nelson Education (majority owned by OMERS) for a total of $7.7bn.

Since the transaction closed in July 2007, Apax Partners has worked closely with management to ensure the company is well positioned for future growth. In particular, the company merged two of its divisions to allow more effective contact with its customers and appointed several new managers to help identify key growth opportunities. Furthermore, on December 3 2007, Cengage Learning announced the acquisition of the Houghton Mifflin college assets from Educational Media and Publishing Group. As part of a large K-12 publisher which has changed ownership three times in the last five years, Houghton Mifflin has significantly underinvested in new product development (especially digital and custom solutions). Cengage Learning believes it can drive significant improvements in operating performance by pushing increased investment in these products.

We believe that as owners we can continue to drive solid growth in the business by continuing to provide students with valuable educational content. In doing so, we hope to make our ownership in Cengage Learning a success for our customers, employees, and ultimately, our investors.