Just as the annual conference of the American Library Association was getting underway in New Orleans, Cengage Learning announced its “definitive agreement” with the National Geographic Society to acquire National Geographic’s School Publishing unit. The acquisition gives Cengage the National Geographic Science series, National Geographic Explorer! Magazines, and Hampton Brown’s literacy and language programs.
Cengage, owned by private equity firms Apax Partners and OMERS, has partnered with National Geographic (NGS), a 501(c)3 non-profit organization, since 2007 to produce English language learning materials for the educational market. This acquisition will expand that partnership, said Cengage president and CEO Ron Dunn in a statement, “in a powerful way that further strengthens our existing English language learning business and enriches our full range of education solutions.” Under the new agreement, Cengage will work with National Geographic in the development, marketing, and distribution of NGS-branded materials across education in the school, higher education, and library markets worldwide.
NGS owns a content library of more than 11 million images, 100,000 hours of videos, an article archive dating back 120 years, plus maps and illustrations. It has a well-developed website, with current information, news, videos, blogs, and photographs supporting its mission of inspiring people “to care about the planet.” National Geographic estimates it reaches more that 400 million people worldwide annually through its many publishing channels and its funding of scientific research projects. The Audit Bureau of Circulations (ABC) pegs circulation of its flagship publication, National Geographic, at 4.5 million as of December 2010.
According to Frank Menchaca, executive vice president, publishing, Gale Cengage Learning, who was at the ALA conference in the Gale booth, the acquisition is an enormous boon for Cengage and one that Gale couldn’t have accomplished as a stand-alone company. It will “radically expand the Cengage product line” and add a high degree of brand recognition. He’s certainly correct: One of the most recognizable logos on the planet is National Geographic’s yellow rectangle with black letters. The logo is trademarked but, presumably, permission to use it is included in the agreement.
The acquisition agreement must still be approved by U.S. regulatory bodies. Thus, it is too early to know how Cengage will fit NGSP into its organization or to speculate on what will happen to existing employees. The price was not disclosed. In the acquisition negotiations, Dickstein Shapiro represented Cengage while Berkery Noyes, in conjunction with Tucker Capital Corp., represented NGS. Berkery Noyes also represented H.W. Wilson in its recent acquisition by EBSCO Publishing.
Menchaca thinks that the acquisition will positively affect Cengage ebooks, since Cengage already owns the book imprints Brooks/Cole, Delmar, Gale, South-Western, and Wadsworth. Additionally, he sees expansions in the digital archives business, which could easily move into the public and academic library markets. There could be possible tie-ins with Cengage’s PowerSpeak Languages, which just added an additional five languages (ESL for Mandarin speakers, Russian, Italian, Japanese, and Korean) to its existing five (Spanish, French, German, Mandarin Chinese, and ESL for Spanish speakers). This aligns nicely with the learning materials in NGSP.
Editorial integrity, something for which National Geographic is famous, will be important to maintain, emphasizes Menchaca, adding that the acquisition will bring a new dimension to libraries, with a series of electronic products and portals becoming available.
Looking ahead, Menchaca is enthusiastic about the content Cengage is acquiring. “It signals a different direction: Cengage is serious about being a global presence and we’re pleased to be partnering with a truly global institution.” He thinks it brings a different dimension to mergers and acquisitions in the information industry. This isn’t a case of one established company buying another, or even an established company picking up a start-up enterprise. This acquisition is of a piece of a highly regarded non-profit institution, one with incredible “star power” and the reputation of a first rate public institution. As Menchaca knows, it’s not the first time a for-profit company in the information industry has bought a product created by a non-profit, but somehow, the National Geographic name brings with it an unparalleled luster, one that Cengage must be careful to preserve.