A new test for an education publisher
Ex-Houghton Mifflin chief is selling his latest firm and drafting plans for a new one
Less than five years after leaving Houghton Mifflin Co. and starting Cambium Learning Inc., an education company, veteran Boston publishing executive and deal maker Nader F. Darehshori has sold his new company to a buyout firm and is planning another start - up.
Darehshori, 70, who during his 12-year tenure as chief executive of Houghton Mifflin was one of Boston's best-known business leaders, said he'll remain on the board of Natick-based Cambium after its purchase by Veronis Suhler Stevenson, a New York private equity firm specializing in media and education industries.
But he also plans to launch a venture focusing on course material in international languages -- especially Chinese, Japanese, Korean, Vietnamese, Arabic, and Persian -- for US college students.
"I've always been interested in college publishing," said Darehshori, who ran Houghton Mifflin's college division before becoming chief executive. "That's where my friends and my acquaintances are. I have no outside interests. I'm not a good golfer, I'm not a good dancer."
Darehshori, however, has proved adept at business deals. After concluding in 2000 that an independent company like Houghton Mifflin couldn't compete with larger rivals, he sold the historic Boston publishing company to France's Vivendi Universal at the top of the market for $2.2 billion in 2001. The next year, Vivendi resold Houghton Mifflin for $1.6 billion to a private equity group, which in November agreed to sell it to an Irish publisher that will pay $1.75 billion and assume $1.6 billion in debt.
Cambium, which focuses on educational software and printed materials for special education and at-risk students from pre school through high school, was started in 2003 by Darehshori and a pair of former Houghton Mifflin colleagues, Dave Cappellucci and George Logue . The co founders secured about $100 million in backing from the private equity firm J.H. Whitney & Co. of New Canaan, Conn.
During the past four years, Cambium acquired several companies, including Kurzweil Educational Systems of Bedford. It now has nearly 300 employees -- 50 to 75 in Massachusetts -- and rings up annual sales of about $100 million. Neither Cambium nor Veronis Suhler Stevenson disclosed the sale price of their deal, which is expected to take effect within 60 days, but executives close to the deal said the New York private equity firm paid more than $300 million.
Eric Van Ert , managing director for Veronis Suhler Stevenson, said the new owner will invest in expanding Cambium's product line and acquiring more businesses to broaden its franchise across the United States and abroad. The goal is to double the company's revenue within five years and then look for a buyer.
The company's growth will be fueled by, among other things, the federal No Child Left Behind law and some state laws that require intervention programs for special needs and at-risk students and training for their teachers. "It's a great market," said Cappellucci, who will take over as chief executive when the deal is complete. "We believe it's being underserved. And we see a lot of runway in front of us."
As for Darehshori, who was born in Iran and raised in and around Chicago, the deal represents an opportunity for yet another new start. He said his next company will be in the Boston area, but he won't begin working on it in earnest until the Cambium deal closes.
"Nader is an excellent businessman," said Lawrence K. Fish , chairman and chief executive of Citizens Financial Group, who also cited Darehshori's friendship with his writers and his involvement with organizations like the Boston Public Library and the Dana Farber Cancer Institute. "There are very few business leaders in the Boston area who don't know Nader -- maybe none. Whatever the civic cause is, Nader's always been there. He loves what he does, so why stop?"
Robert Weisman can be reached at weisman@globe.com. 