Sale of Houghton Mifflin Completed

BOSTON – Houghton Mifflin Company today announced the completion of the sale of the Company to a consortium of private investment firms comprised of Thomas H. Lee Partners, Bain Capital and funds managed by The Blackstone Group. The leading Boston-based publisher, with over $1 billion in sales, was acquired from Vivendi Universal for $1.66 billion.

“We are fortunate to be associated with this impressive group of experienced private equity firms,” said Hans Gieskes, President and CEO of Houghton Mifflin. “During the past few months, we have been working closely with the group, and have had fruitful discussions about the great opportunities for our business. We hold similar views on how to grow the Company, both organically and, possibly, through strategic acquisitions.”

“Houghton Mifflin is a leader in its markets and a company that continues to perform well despite a challenging market environment,” said Mark Nunnelly, Managing Director at Bain Capital. “We are looking forward to working closely with Houghton Mifflin’s experienced management team to build out key franchises and capitalize on the strong prospects to grow the company in its entirety.”

“Houghton Mifflin is an outstanding company in an industry that has very strong growth characteristics,” said Scott Sperling, Managing Director of Thomas H. Lee Partners. “We intend to keep it in Boston, and grow it.” Seth Lawry, Managing Director of Thomas H. Lee Partners, added, “Houghton Mifflin’s 170-year history and exceptional set of brand names position it well with educators and students across the country. The company has leading positions in most of the segments in which it competes, and we believe there is potential to extend its market leadership with new offerings.”

About Bain Capital

Bain Capital is a leading global investment firm managing over $14 billion in assets, including private equity, early stage venture capital, high-yield debt and public equity. Bain is unique in its industry given its strategy consulting background and expertise that enables the firm to provide its portfolio companies and management partners with significant strategic and operational support. Since its inception in 1984, Bain has raised seven private equity funds and has invested in more than 225 companies. Headquartered in Boston with additional offices in New York, San Francisco, London and Munich, Bain has assembled one of the largest and most experienced investment teams in the world consisting of more than 160 investment professionals.

About Thomas H. Lee Partners

Thomas H. Lee Partners is one of the oldest and most successful private equity investment firms in the US. Since its founding in 1974, THL has invested in more than eighty businesses, building companies of lasting value and generating attractive returns for its investors and operating managers. THL currently manages five funds, with aggregate capital commitments of approximately $14 billion. Its most recent equity fund (Fund V), with over $6.1 billion of committed capital, is one of the largest buyout funds ever raised. THL has more than twenty investment professionals based in Boston and the firm’s partners have worked at THL for an average of fourteen years.

About The Blackstone Group

The Blackstone Group, a private investment bank with offices in New York and London, was founded in 1985. The firm has raised a total of approximately $24 billion for alternative asset investing since its formation, over $14 billion of which has been for private equity investing. The Blackstone Group’s six core businesses are Mergers and Acquisitions Advisory, Restructuring and Reorganization Advisory, Private Equity Investing, Private Real Estate Investing, Corporate Debt Investing, and Liquid Alternative Asset Management.

About Houghton Mifflin

Boston-based Houghton Mifflin Company, a unit of Vivendi Universal, is one of the leading educational publishers in the United States, with over $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 non-fiction for adults and young readers. Additionally, Houghton Mifflin offers computer-administered testing programs and services for the professional and certification markets. With its origins dating back to 1832, Houghton Mifflin today combines its tradition of excellence with a commitment to innovation. The Company’s web site can be found at www.hmco.com.