Wednesday 21 March 2018

O'Callaghan steps down as chief executive of education publishing firm

Emmet Oliver

Barry O'Callaghan, who lost control of his multi-billion-euro education publishing company last year, has stepped down as chief executive to pursue other interests.

It is understood he will be an advisor to the firm for a year, but is governed by a non-compete clause for the foreseeable future.

Mr O'Callaghan, who was once one of the richest businessmen in Ireland, is resigning as chief executive of Houghton Mifflin Harcourt, 12 years after he took a small Irish publisher Riverdeep and made it one of the largest publishers in the US after a series of debt-fuelled mergers and acquisitions.

Last February, bondholders in the company converted about 60pc of their debts into equity in Mr O'Callaghan's company, leaving his stake worth close to zero. Mr O'Callaghan admitted at the time he has lost more money from this turn of events than anyone in the company.

Mr O'Callaghan's future is uncertain, though he continues to chair another education publisher active in Asia and has extensive interests in Ireland.

The key force at Houghton Mifflin is now John Paulson, arguably the world's most powerful hedge fund investor after George Soros. Mr Paulson is believed to hold a 30pc stake in the company.

Speaking to the Irish Independent, Mr O'Callaghan's temporary successor, Michael Muldowney, said the Irishman was an entrepreneur, more interested in creating businesses than running them as a management figure. He said the business was now growing top line revenues by about 5pc.

While Houghton finished up 2009 with debts of over $7bn, the debt load is now down to about $3bn with cash at $500m. Mr O'Callaghan was not available for comment yesterday.

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