Filing Flows › McGraw Hill (MH) › Takeover & LBO
Is McGraw Hill (MH) a takeover target?
A leveraged buyout at today's price plus 30% ($17.34 a share) would return about 8% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $11.24 a share (−16% against today's $13.34). Historically 6.6% of companies with its figures were bought within a year (1.31× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $17.34 | today's $13.34 plus 30% |
| × shares | 191.5 million | |
| = Equity value | $3.3B | |
| + Debt refinanced | $2.5B | |
| − Cash | $233M | |
| = Enterprise value | $5.6B | 8.7× EBITDA of $642M |
| Fees | $112M | 2% of the price |
| New debt | $3.5B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $2.2B | 38% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $2.1B | $638M | $270M | $271M | $3.3B |
| Year 2 | $2.1B | $639M | $250M | $290M | $3.0B |
| Year 3 | $2.1B | $647M | $227M | $313M | $2.7B |
| Year 4 | $2.1B | $660M | $203M | $343M | $2.3B |
| Year 5 | $2.2B | $680M | $177M | $380M | $1.9B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 7.5× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $5.1B | |
| − Debt left | $1.9B | |
| = Buyer's equity | $3.2B | |
| Money multiple | 1.46× | on $2.2B put in |
| Buyer's yearly return (IRR) | 7.8% |
Price against return
What the buyer makes at other premiums over today's $13.34; the IRR reaches 20% at $11.24 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $14.67 | 13.1% |
| 20% | $16.01 | 10.5% |
| 30% | $17.34 | 7.8% |
| 40% | $18.68 | 5.4% |
| 50% | $20.01 | 3.3% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.1B | |
| EBITDA, last 12 months | $642M | 30.9% of revenue |
| Depreciation and amortization | $363M | |
| Capital spending | $96.7M | |
| Debt | $2.5B | |
| Cash | $233M | |
| Share price | $13.34 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows -0.7% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 12% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, McGraw Hill would cost about $17.68 a share, $3.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $16.01 | $3.1B |
| Median | 32.5% | $17.68 | $3.4B |
| High end (a quarter paid more) | 51.8% | $20.25 | $3.9B |
The odds, from history
Historically 6.6% of companies with its figures were bought within a year (1.31× the average). Its figures put it in decile 8 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
McGraw Hill's latest quarter
McGraw Hill, Q2 FY27: revenue $632M (-6% year over year), operating margin 22.3%, net earnings $86.4M, operating cash flow $189M. The chart follows the revenue to costs, profit and cash.
Questions
Is McGraw Hill being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy McGraw Hill?
A leveraged buyout at today's price plus 30% ($17.34 a share) would return about 8% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $11.24 a share (−16% against today's $13.34).
What would a takeover of McGraw Hill cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, McGraw Hill would cost about $17.68 a share, $3.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.