Acquisition Extends Riverside Publishing’s Reach Into Web-based Testing
BOSTON–(BUSINESS WIRE)–May 8, 2000–Houghton Mifflin Company (NYSE:HTN – news ) today announced that it has acquired Alabama-based Virtual Learning Technologies, an educational Internet testing company that specializes in on-line assessments. VLT will be integrated into Riverside Publishing, Houghton Mifflin’s academic and clinical assessment unit, and will complement Riverside’s core competencies of test development and delivery by extending its reach into the growing electronic testing market. Terms of the all-cash agreement were not disclosed.
This strategic move provides Riverside Publishing with an innovative and significant opportunity for growth in the K-12 testing market, and increases its capacity to offer on-line assessment materials and services. It also reflects Houghton Mifflin’s commitment to expanding the reach of its content and services beyond traditional platforms and channels and to meeting the changing needs of its customers.
“The acquisition of Virtual Learning Technologies is a logical extension of our existing academic testing products and services,” said Nader F. Darehshori, Chairman, President and Chief Executive Officer of Houghton Mifflin. “It significantly enhances our presence in the growing on-line educational testing market with an established Web-based platform for use in schools and provides us with a range of synergistic opportunities with our other divisions.”
Mr. Darehshori added, “Due to the anticipated investments in creation of content for on-line delivery and other costs associated with development of this new business venture, we expect the acquisition to be dilutive to earnings in 2000 by $.08 to $.10 per share and by approximately the same amount in 2001. This dilution may be partially offset by future licensing revenues.”
“The rapid growth of high-stakes testing has led to an increased demand for reliable and valid interim and ongoing assessments designed to help educators target their instruction. Tests that are available on-line and on demand will provide teachers and students with immediate feedback on progress against state standards. Together, Riverside Publishing and Virtual Learning Technologies are ideally suited to meet the demand with quality on-line assessments customized to state standards,” said John Laramy, President of Riverside Publishing.
Currently, 49 states have established academic standards. Of those, approximately 45 have implemented, or plan to implement, testing programs that measure students’ and schools’ progress against state-specific standards. Given the importance and prevalence of such high-stakes tests, educators are turning to low- to mid-stakes tests to monitor the ongoing progress of students and to identify students at risk of not meeting state standards. Additionally, low- to mid-stakes tests serve as a means to enable teachers to better meet the learning needs of students and increase achievement as they strive to meet state standards.
As roughly 63 percent of instructional rooms in schools have access to the Internet, and with many schools taking advantage of the Federal e-rate program, more educators are moving toward Web-based assessments in the low- to mid-stakes testing market. The Internet offers a cost-efficient and flexible alternative to low- to mid-stakes paper and pencil tests.
“The combination of Riverside’s assessment capability and VLT’s patented technology will provide educational stakeholders the power to make real-time instructional data-driven decisions. Assessment can now be displayed as a learning coach versus just a static event,” added T. Alan Ritchie, CEO of Virtual Learning Technologies.
Houghton Mifflin is a leading publisher of 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 fiction and non-fiction for adults and young readers. The Company’s Internet site can be found at www.hmco.com.
“Safe Harbor” Statement under Private Securities Litigation Reform Act of 1995: This report includes forward-looking statements which reflect Houghton Mifflin’s current views about future events and financial performance. Words such as “believe,” “expect,” “anticipate,” and similar expressions identify forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations, and we expressly do not undertake any duty to update forward-looking statements. These factors include, but are not limited to: (i) cost of development and market acceptance of our educational and testing products and services; (ii) the seasonal and cyclical nature of our educational sales; (iii) possible changes in funding in school systems throughout the nations, which may result in both cancellation of planned purchases of educational and testing products and services and shifts in timing of purchases; (iv) changes in purchasing patterns by elementary and secondary schools and colleges; (v) changes in the competitive environment, including those which could adversely affect selling expenses; (vi) regulatory changes which could affect the purchase of educational and testing products and services; (vii) strength of the retail market for general-interest publications and market acceptance of newly published titles and new electronic products; (viii) delays or unanticipated expenses in connection with development of new CAT products or establishment of CAT testing facilities; and (ix) other factors detailed from time to time in Houghton Mifflin’s filings with the Securities and Exchange Commission.
Houghton Mifflin Company
Susan E. Hardy
Vice President, Investor Relations
Director, Media Relations