Paris and New York, July 9, 2001 - Vivendi Universal (Paris Bourse:EXFP; NYSE: V) today announced that its cash offer for all outstanding shares of commonstock of The Houghton Mifflin Company expired, as scheduled, at 12:00 midnight, New YorkCity time on July 6, 2001.
Vivendi Universal, through its wholly owned subsidiary making theoffer, Soraya Merger Inc., has accepted for purchase all shares validly tendered and notproperly withdrawn prior to the expiration of the offer.
The acceptance of these shares in the tender offer results in VivendiUniversal's ownership of approximately 90% of the shares (including shares subject toguaranteed deliveries) of Houghton Mifflin's outstanding common stock.
In the second step of the acquisition, Soraya Merger Inc. will bemerged with and into Houghton Mifflin and each share not previously purchased in thetender offer will be converted, subject to appraisal rights, into the right to receive$60.00 in cash.
The merger will be completed as soon as practicable.
The transaction is valued at approximately $2.2 billion, including theassumption of approximately $500 million of average net debt of Houghton Mifflin.
The acquisition will allow Vivendi Universal to undertake immediatesynergies in production/logistics and corporate restructuring with Vivendi UniversalPublishing's (VUP's) U.S. operations. VUP estimates that those synergies willreach at least $75 million per year at the EBITDA (earnings before interest, taxes,depreciation and amortization) level before the end of 2002. Thanks to the financing ofthe transaction, mostly through asset sales, the transaction will have no significantimpact on Vivendi Universal's balance sheet, and will be accretive for VivendiUniversal shareholders at EBITDA/share level from year one, both before and aftersynergies. After pro forma synergies, this accretion is over 2%.
Houghton Mifflin is a pure play educational publisher (roughly 90% ofsales) serving all the components of the market (elementary and secondary schools,supplemental, testing and college) and utilizing multiple platforms (core basal textbooks,supplemental materials, assessment, instructional technology). The company also publishesan extensive line of reference works and fiction and non-fiction for adults and youngreaders, including The Lord of the Rings and Curious George. HoughtonMifflin provides also computer-testing capabilities to the corporate market.
This strategic acquisition is another step forward for VivendiUniversal to achieve world leadership in key content segments. It will put the company inan excellent position to capitalize on the growth of the education sector by leveragingthe content and technologies of both companies across all of Vivendi Universal.
Vivendi Universal's priority is to develop the most attractive andcompelling content offering on all devices and platforms for consumers. Vivendi Universalnow has worldwide leadership positions in music, film, games, and education. Theacquisition of Houghton Mifflin propels Vivendi Universal Publishing to the No. 2 positionworldwide in education publishing and significantly enhances its position in the U.S.textbook market. Already a leader in France, Spain and Brazil, with a very strong marketshare throughout Europe and Latin America, with this transaction, VUP will become aneducation publishing leader in the U.S. Vivendi Universal Publishing will also have astrong position on as many platforms as possible, including the Internet, publishing andCD-ROM.
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