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McGraw-Hill sells education division to Apollo

Associated Press Modified: November 26, 2012 at 5:30 pm •  Published: November 26, 2012

The company said it plans to use the proceeds from the sale, estimated at $1.9 billion, to fund its stock buyback program, make acquisitions and pay off debt.

Starting in the fourth quarter, McGraw-Hill will classify the education business as discontinued operations. It expects to take a non-cash impairment charge in the fourth quarter of about $450 million to $550 million related to the division.

McGraw-Hill first announced plans to split into two companies in September 2011 through either the sale or the spin-off of the education arm. Earlier this month, the company reported a 14 percent drop in third-quarter net income, partially as a result of the planned split.

McGraw-Hill shares rose 20 cents to close at $51.89 Monday, off its session high of $53.60. Shares of New York-based Apollo fell 6 cents to $15.27, regaining most of its earlier drop to $15.12.