Houghton Mifflin Co. - 12/22/06

HM Rivergroup PLC Announces the Completion of the Previously Announced Acquisitions of Houghton Mifflin Company and Riverdeep Holdings Limited

DUBLIN, Ireland, SAN FRANCISCO, Calif. and BOSTON, Mass.—December 22, 2006—HM Rivergroup PLC, a newly-formed Irish public limited company, announced today that it has completed the acquisitions of Houghton Mifflin Holding Company, Inc. and Riverdeep Holdings, Limited. With the transactions now completed, HM Rivergroup PLC will change its name to Houghton Mifflin Riverdeep Group PLC.

Houghton Mifflin Holding Company, a leading U.S. educational publisher, was acquired for approximately $1.75 billion in cash plus the assumption of approximately $1.61 billion in net debt, from affiliates of private investment firms Thomas H. Lee Partners, Bain Capital Partners, and The Blackstone Group, and management. Riverdeep Holdings Limited, a leading U.S. publisher of branded interactive educational and personal publishing products controlled by Barry O'Callaghan, executive chairman of HM Rivergroup PLC, was acquired in a share-for-share exchange valuing Riverdeep at approximately $1.2 billion, including the assumption of net debt. 

"We are thrilled to announce the completion of the agreement to merge these two industry leaders that share complementary assets and a common vision for the future of education. Through the powerful combination of Houghton Mifflin's superior basal content and sales force and Riverdeep's leading interactive courseware, we will be able to offer customers the most comprehensive, flexible and innovative educational solutions available from one company," said Tony Lucki, chairman, president and CEO of Houghton Mifflin, and vice chairman of HM Rivergroup PLC.

"HM Rivergroup PLC will be a global company with significant future growth opportunities and the most competitive product offerings in the industry," said O'Callaghan.

HM Rivergroup PLC will be headquartered in Dublin, with its largest U.S. office located in Boston.

About Riverdeep Holdings Limited
Riverdeep Holdings Limited, with offices in San Francisco, California; Cedar Rapids, Iowa; Dublin, Ireland; and Manchester, United Kingdom, is a leading publisher of interactive products focusing on education and personal productivity for the consumer and school markets. Riverdeep's rich portfolio of interactive, award-winning products feature such well-known brands as the Destination Success^® solution, which includes Destination Math^® and Destination Reading^®; The Print Shop^®; Reader Rabbit^® and Kid Pix^®. For more information visit www.riverdeep.net.

About Houghton Mifflin
Boston-based Houghton Mifflin Company is one of the leading educational publishers in the United States, with more than $1 billion in sales. Houghton Mifflin publishes textbooks, instructional technology, assessments and other educational materials for elementary and secondary schools and colleges. The Company also publishes an extensive line of reference works and award-winning fiction and nonfiction for adults and young readers. With its origins dating back to 1832, Houghton Mifflin combines its tradition of excellence with a commitment to innovation. The company's Web site can be found at www.hmco.com.