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"disclaimer", "status": "active", "canonId": "91173477-d91f-4024-bbaf-d4f93e3f82dc", "version": 1, "description": "Legal/cautionary text that occupies most of the body of its slide." }, "tool": null, "subkind": null, "framework": null }, "subkind": "disclaimer", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 20:02:48.049+00", "model": "google/gemini-3.5-flash", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "15140e2b-d477-4aaf-a5a0-61a4bfab6dcf", "parentComponentId": null }, { "bbox": { "h": 0.04, "w": 0.12, "x": 0.84, "y": 0.93 }, "kind": "image", "text": "Engine Capital", "attrs": null, "canon": { "kind": { "name": "Image", "slug": "image", "status": "active", "canonId": "019de52c-f978-701f-a720-51d029d769e7", "version": 1, "description": "Photo, illustration, screenshot or icon." }, "tool": null, "subkind": { "name": "Logo", "slug": "logo", "status": "active", "canonId": "019de52c-fdaf-743d-94c4-d7c6a0e55302", "version": 1, 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It implies Veritas is buying HMHC for 7.6x 2024 unlevered free cash flow (UFCF) and 6.2x 2024 UFCF if the cumulative cash flow is included. This offer is the result of a flawed process conducted by Evercore. We believe Evercore is conflicted, and its fairness opinion contains numerous mistakes. This offer also represents a very small premium vs. where the stock would be after the announcement of strong Q4 results. Applying a 30% change of control premium to that stock price points to a fair transaction value of $25.35 per share. 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As this digital transition progresses, we believe HMHC will deserve a higher multiple over time", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 20:02:48.049+00", "model": "google/gemini-3.5-flash", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "aacdf96c-34c5-4849-8b77-2e98492d07be", "parentComponentId": null }, { "bbox": { "h": 0.13, "w": 0.92, "x": 0.04, "y": 0.61 }, "kind": "list", "text": "Under most circumstances, Veritas will earn outsized returns from this transaction. Under management's forecast, Veritas is set to earn a 5-year IRR between 31% and 37% at the $21 per share deal price. These outsized IRR are further evidence of the inappropriateness of the $21 Veritas offer and simply represent a transfer of value from HMHC shareholders to Veritas. Under management's forecast, Veritas can pay $26 per share and still earn a 5-year IRR between 18% and 23%", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 20:02:48.049+00", "model": "google/gemini-3.5-flash", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "d00d16fa-821b-41d9-95cf-a73cce70c776", "parentComponentId": null }, { "bbox": { "h": 0.1, "w": 0.92, "x": 0.04, "y": 0.78 }, "kind": "list", "text": "A superior plan exists for shareholders. Houghton Mifflin should execute a Dutch tender offer between $21 and $22 per share for 19% of its shares outstanding. 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HMHC would also have provided strong guidance for 2022 given management's forecast per the Schedule 14D-9 and announced a refinancing. We expect the stock would have reacted very positively\nIf we apply that 10.25x multiple on 2022 UFCF of $220 million and use the Q4 balance sheet information, HMHC would be at $18.25 implying a premium of 15%. Since HMHC would have refinanced its debt and probably would have initiated a share buyback, we believe the multiple would have expanded. At 11x 2022 UFCF, the stock would be at $19.50 per share. 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Applying a 30% change of control premium to that $19.50 number points to a fair transaction value of $25.35 per share", "attrs": null, "canon": { "kind": { "name": "Paragraph", "slug": "paragraph", "status": "active", "canonId": "5f2affc0-941d-4d07-959d-4bfc1930cea4", "version": 1, "description": "Single prose block in the body of a slide." }, "tool": null, "subkind": null, "framework": null }, "subkind": "description", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:18.682+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "d81bff9c-cbfb-4665-a862-0021ff3d8afe", "parentComponentId": null }, { "bbox": { "h": 0.08, "w": 0.92, "x": 0.04, "y": 0.04 }, "kind": "title", "text": "The $21 per share doesn't provide a sufficient premium when compared to where the stock would be following strong Q4 results", "attrs": null, "canon": { "kind": { "name": "Title", "slug": "title", "status": "active", "canonId": "019de52c-f7dd-76d9-b848-b1f12bd85cf4", "version": 1, "description": "Slide title or headline." }, "tool": null, "subkind": { "name": "Headline", "slug": "headline", "status": "active", "canonId": "019de52c-fae1-7463-9a7c-d60668eced0d", "version": 1, "description": null }, "framework": null }, "subkind": "headline", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:18.682+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "5d7bc26d-b66e-4bce-8a80-37de265bd798", "parentComponentId": null } ], "metrics": [], "tools": [], "frameworks": [ { "matchId": "4b256e96-0b0a-46ba-8a03-bbb8051d1d18", "evidence": "The chart shows a bridge from current trading price to projected fair value based on Q4 results.", "framework": null, "confidence": 0.8, "extraction": { "at": "2026-07-16 19:26:18.682+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "pageNumber": 9, "frameworkName": "valuation-bridge" } ], "arcBeats": [ { "to": 14, "arc": { "name": "Problem-Agitate-Solution", "slug": "problem-agitate-solution", "status": "active", "bestFor": "Sales pitches, urgency-driven, competitive displacement", "canonId": "019dd956-5ec6-70f9-9fd8-fdbaaff39acf", "version": 1, "bodyDocId": "019df22a-2356-73eb-8061-d8c81dc0aa49", "structure": "Problem (Identify pain) -> Agitate (Make it worse) -> Solution (Provide relief)", "description": null, "familyLabel": null }, "from": 6, "name": "Agitate", "beatId": "c6917caa-12c6-425e-8da7-fcc510eea151", "matchId": "63aaa994-001f-4fe5-80be-bd5043498b20", "beatType": { "name": "Agitate (Make it worse)", "slug": "problem-agitate-solution-agitate-make-it-worse", "status": "active", "canonId": "019dd9b8-0f5a-71dd-bae7-8fadb0d09456", "version": 1, "description": null }, "evidence": "The document highlights the flaws in the sales process and the undervaluation of the company", "position": 1, "isPrimaryArc": true, "parentBeatType": { "name": "Development", "slug": "development", "status": "active", "canonId": "019dd9b8-0332-7008-b3aa-11b0840a57b1", "version": 1, "description": "The middle stretch in arcs that have one. 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Evercore uses the company's net debt as of 3/31/2022 to derive different equity values in its public company trading analysis...\n2. In that same public company trading analysis, Evercore failed to include the tax attributes valuation of around $2 per share...\n3. Between the tax attributes (around $2 per share) and capitalizing the business at a low point in its cash generation seasonality (>$1 per share), the equity value calculated by Evercore in its public company trading analysis understates fair value by at least $3 per share\n4. In its public company trading analysis, Evercore did not consider the much higher multiples of education technology peers when considering the Adj. EBITDA metric\n5. 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Assuming management's projections, Engine believes this plan could result in a share price around $42 at the end of 2024, implying a 26% 3-year IRR for remaining shareholders", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "31d43206-7cbb-45ed-883b-1dd03d33a536", "parentComponentId": null }, { "bbox": { "h": 0.22, "w": 0.92, "x": 0.04, "y": 0.15 }, "kind": "list", "text": "The Veritas offer undervalues HMHC. 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Recent comparable deals point to a $25 per share transaction value for HMHC", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "3579e21b-8d91-49c5-af12-1ee6ca3d3d88", "parentComponentId": null }, { "bbox": { "h": 0.15, "w": 0.92, "x": 0.04, "y": 0.47 }, "kind": "list", "text": "Under most circumstances, Veritas will earn outsized returns from this transaction. Under management's forecast, Veritas is set to earn a 5-year IRR between 31% and 37% at the $21 per share deal price. These outsized IRRs are further evidence of the inappropriateness of the $21 Veritas offer and simply represent a transfer of value from HMHC shareholders to Veritas", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "6e21bd80-1dc9-44f5-8bc6-953c2362fcf6", "parentComponentId": null }, { "bbox": { "h": 0.07, "w": 0.92, "x": 0.04, "y": 0.38 }, "kind": "list", "text": "This offer is a result of a flawed process conducted by Evercore. We believe Evercore is conflicted, and its fairness opinion is filled with mistakes", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "70611b76-266d-4cbd-8bf3-ab3edfd4111c", "parentComponentId": null }, { "bbox": { "h": 0.07, "w": 0.92, "x": 0.04, "y": 0.64 }, "kind": "list", "text": "Veritas can pay a significantly higher price and still generate a 5-year IRR above 17.5%. Under management's forecast, Veritas could pay $26 per share and still earn a 5-year IRR between 18% and 23%", "attrs": null, "canon": { "kind": { "name": "List", "slug": "list", "status": "active", "canonId": "019de52c-f94b-779b-a53b-fd4904a5f4d2", "version": 1, "description": "Bullet or numbered list." }, "tool": null, "subkind": { "name": "Bullet list", "slug": "bullet", "status": "active", "canonId": "019de52c-fc98-7169-a083-5cab805076ca", "version": 1, "description": null }, "framework": null }, "subkind": "bullet", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "d8eb529f-2d84-4ad1-b241-f3123bebccab", "parentComponentId": null }, { "bbox": { "h": 0.04, "w": 0.15, "x": 0.04, "y": 0.08 }, "kind": "title", "text": "Conclusion", "attrs": null, "canon": { "kind": { "name": "Title", "slug": "title", "status": "active", "canonId": "019de52c-f7dd-76d9-b848-b1f12bd85cf4", "version": 1, "description": "Slide title or headline." }, "tool": null, "subkind": { "name": "Headline", "slug": "headline", "status": "active", "canonId": "019de52c-fae1-7463-9a7c-d60668eced0d", "version": 1, "description": null }, "framework": null }, "subkind": "headline", "groupRole": null, "confidence": null, "extraction": { "at": "2026-07-16 19:26:21.955+00", "model": "google/gemini-3.1-flash-lite-preview", "runId": null, "seconds": null, "promptVersion": null }, "componentId": "bedf4ad3-4c07-45c7-a7e9-551f159191b3", "parentComponentId": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 21, "arc": { "name": "Problem-Agitate-Solution", "slug": "problem-agitate-solution", "status": "active", "bestFor": "Sales pitches, urgency-driven, competitive displacement", "canonId": "019dd956-5ec6-70f9-9fd8-fdbaaff39acf", "version": 1, "bodyDocId": "019df22a-2356-73eb-8061-d8c81dc0aa49", "structure": "Problem (Identify pain) -> Agitate (Make it worse) -> Solution (Provide relief)", "description": null, "familyLabel": null }, "from": 18, "name": "Action", "beatId": "eb677ea7-65d3-4a8c-8f2c-ea7eb116b2b0", "matchId": "63aaa994-001f-4fe5-80be-bd5043498b20", "beatType": { "name": "Action", "slug": "aida-action", "status": "active", "canonId": "019dd9b8-1285-74f0-8552-c04c08014586", "version": 1, "description": null }, "evidence": "The document concludes with a call to action for shareholders", "position": 3, "isPrimaryArc": true, "parentBeatType": { "name": "Resolution", "slug": "resolution", "status": "active", "canonId": "019dd9b8-045d-703b-8dd7-e92aba3ba91b", "version": 1, "description": "How the deck ends. Required in 19/20 arcs. The exception (Sparkline) ends with new bliss which is functionally a resolution." }, "alignedBlockIds": null, "matchConfidence": 0.8 } ], "loops": [], "locked": true } ], "arcBeats": [ { "from": 4, "to": 5, "label": "Problem", "description": "The document identifies the problem with the offer and its impact on shareholders" }, { "from": 6, "to": 14, "label": "Agitate", "description": "The document highlights the flaws in the sales process and the undervaluation of the company" }, { "from": 15, "to": 17, "label": "Solution", "description": "The document presents a superior plan for shareholders" }, { "from": 18, "to": 21, "label": "Action", "description": "The document concludes with a call to action for shareholders" } ], "loops": [ { "from": 10, "to": 10, "label": "Analogy", "description": "Highlight the undervaluation of Houghton Mifflin Harcourt" }, { "from": 13, "to": 13, "label": "Cost Of Inaction", "description": "Highlight the cost of accepting the $21 per share offer" }, { "from": 17, "to": 17, "label": "Before After", "description": "Present a superior plan for shareholders" } ] }