Gale is a division of Cengage Learning Inc., a privately held for-profit corporation based in Stamford, CT, heavily invested in textbook publishing. Gale publishes major databases of digitized materials for the post-secondary academic market.
Overview
Website
Type of Organization
Provider Role(s)
Details
Alternative Names
Cengage Learning
Prior Names
Gale Research Company
Gale Group
Parent Organization
Cengage Learning Inc.
Year established
1954
Still in Operation
Yes
Main Address
27500 Drake Road
Farmington Hills, MI 48331-3535
United States
Subject Areas
Resource Types
CRL Analysis & Profile
Mission Statement
Cengage’s mission, as described on the company’s website (2014), is to be “the most respected and innovative source of teaching, learning, and research solutions for the academic, schools, professional and library markets worldwide.” The website also indicates that the firm is devoted to producing courseware, textbooks, databases, and tools that promote research and learning at the K-12, postsecondary, and adult levels.
History
Cengage Learning Inc. was formed in 2007, through the divestment of Thomson Learning by Canadian information publisher the Thomson Corporation. At that time, the Thomson Corporation was in need of capital to finance its buyout of Reuters Group plc. Thomson sold Thomson Learning for $7.75 billion to Apax Partners LLP (a private equity investment group) and Omer Capital Partners (which also manages the Ontario Municipal Employees Retirement System fund).
Cengage subsequently acquired a number of other properties in the educational publishing field: Houghton Mifflin’s College Division, High Beam Research, Gatlin Education Services (now known as ed2go), and PAL Publications, and in August 2011, the National Geographic Society’s School Publishing Unit.
Cengage Learning also inherited some well known publishing brands from Thomson. These include:
- Heinle, a language textbook publisher
- Wadsworth, publishers of books and digital content for the humanities and behavioral and social sciences
- Delmar Learning with products and services for adults in the areas of health care, technology, and career education
- Brooks/Cole, publishers in math, chemistry, social work, and counseling
- South-Western, business and economics texts
- Course Technology, integrators of textbooks with software
- Gale, a publisher of library reference materials and primary source content
In July 2010, Cengage combined their three divisions, Academic and Professional, Gale, and International, into one business unit. This led to “greater integration of content and technology among its products and services, eliminated organizational redundancies, and focus technology investments.” The company next reorganized its functional areas in September 2011. That restructuring consolidated the Academic & Professional Group and Gale.
In 2013 Cengage filed for bankruptcy and subsequently underwent financial restructuring. It emerged from bankruptcy in early 2014.
Financial Information
Cengage’s financial situation is complex; it is a major player in its field but is saddled with huge debts. At this time, the main concern over Cengage’s financial future is related to their debt load and the vagaries of the textbook publishing market. 95.9% of Cengage’s market is in the U.S.
In 2010-2011 71% of Gale's revenue was from recurring subscriptions and sales. 93% of its digital subscriptions in those years were renewals. This suggests that there is little new growth in the market for Gale products.
The combination of a flat market and continually rising expenses, the latter stemming from technology investments and further Cengage acquisitions, resulted in steep operating losses for parent company Cengage in 2007-2012. Cengage continued to carry a sizable debt load from its purchase in 2007. According to the auditors’ report on the corporation’s finances at the end of 2011, Cengage’s then current liabilities exceeded its current assets by over $16 million, and the organization had an accumulated deficit of over $33 million.
In early 2013, The Financial Times reported that “Cengage must repay $2.42 billion of debt between June 2014 and June 2015 unless it can renegotiate the terms of its borrowings. Interest payments are due in June 2013, when PriceWaterhouseCooper, its auditor, must decide whether to qualify Cengage’s accounts.”
In 2013 the British private equity firm Apax Partners held a debt of several billion left from its purchase of Cengage for $7.75 billion in a 2007 leveraged buy-out. Between February and November 2013, Apax bought up more than $800 million of Cengage’s debt. This move was widely interpreted as a way to keep control of the company should Cengage file for bankruptcy.
In July 2013 Cengage filed for bankruptcy. In February 2014, Cengage reached a settlement with its creditors, eliminating $4 billion of its debt and securing an additional $1.75 billion in bankruptcy exit financing. At that time Moody's Investors Service assigned Cengage a "B2 Corporate Family Rating" and a "B2-PD Probability of Default Rating." Moody's also assigned a B2 rating to Cengage's proposed $1.75 billion loan obtained as part of its bankruptcy exit financing. Moody's reported that "Proceeds from the senior secured term loan as well as roughly $550 million of balance sheet cash will be used to fund a combined $2.3 billion of payments to prior first lien creditors, emergence costs, and financing fees. The rating outlook is stable."
Staff reductions by Cengage continued to affect Gale into 2014, which lost a number of senior executives in 2013-2014.
Annual reports: Cengage Learning Holdings II, LP Third Quarter Report, through March 31, 2013
Governance: Board / Owners / Parent organization
Cengage Learning is essentially controlled by its majority shareholder, the private equity firm Apax Partners LLP. CEO, Michael E. Hansen, appointed in September 2012, was previously chief executive at Elsevier Health Sciences. The former CEO, Ronald G. Dunn, had held the position since Cengage’s inception in 2007, and after 2012 continued to hold the post of Chairman of the Board of Directors.
Most members of the Cengage’s Board of Directors are appointed by Apax Partners. Also serving on the Board are David Shaffer of Thomson Reuters Corporation and Christian Stahl of Apax Partners, LLP.
In the Spring of 2019, Gale's parent company Cengage Learning merged with the learning science company, McGraw-Hill.
Technical Information
Gale collections are hosted on the Cengage Learning platform, which provides web access to subscribers through a proprietary interface.
The Gale historical collections (newspapers and archive materials) are also preserved by Portico, under an agreement that enables Portico to provide access to the collection in the event that the publisher no longer supports online access of the materials. The right granted to Portico by Gale to provide access applies only to institutions that purchase the databases from Gale.
On August 12, 2016 Gale reported to clients that its Public Life in Contemporary Argentina and The Life and Times of Jorge Luis Borges products were to be “decommissioned” on August 17. Gale subsequently decided to extend the lifetime of the two products through December 31, 2016. Gale reported that “the products are located on aging servers of a legacy nature that Gale purchased years ago and that purchasing institutions still “own” the content and that Gale will “compile the digital files of [library] archive(s) onto a physical medium to send to [them].”
Access
Access to Gale collections is provided through Gale's own proprietary interface.
Legal Information
Gale relies on the legal counsel and authority of the parent company, Cengage Learning, in matters of licensing terms and rights. Gale uses a uniform licensing agreement for all of its databases.
Sources
Gale sources materials from a range of U.S. and non-U.S. providers, including the British Library, American Antiquarian Society, Smithsonian Institution, Associated Press, and several academic and independent research libraries.