The McGraw-Hill Companies, owner of Standard & Poor's, has announced that it will separate its financial business from its education segment under what it calls a “growth and value” plan.
McGraw-Hill Markets, as it will now be known, will focus on the data and analytics services for the capital and commodities markets. The two primary brands under this banner are Standard & Poor's for capital markets, and Platts for commodities, with these two sectors accounting for 90 percent of the company's revenue. Harold (Terry) McGraw III will lead the vendor as chairman, president and CEO. McGraw-Hill Education will continue its operation in the K-12, higher education and professional education sectors.
The McGraw-Hill Companies has been under sustained pressure from its two biggest shareholders—the hedge fund Jana and the Ontario Teachers' Pension Plan—for some time to spin off its collected businesses, in an attempt to stave off a three-year decline in its share price.
"There is a growing need for investors to be able to track price movements across all asset classes," says McGraw. "At the same time, there is a dearth of tools that meet this need. This creates an existing and fast-growing opportunity for McGraw-Hill Markets to deliver integrated solutions on commodities, fixed income, equity, credit, and funds that inform strategy and trade ideas on cash, derivatives and volatility indices. When our premier brands are combined into one focused operating company, McGraw-Hill Markets immediately becomes the player with the greatest breadth of capabilities in the financial markets."
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