Learning Company Inc. said Tuesday it will retire $150 million in debt by issuing preferred stock to Thomas H. Lee Co., Bain Capital Inc. and Centre Partners Management LLC.
The transaction will reduce Learning’s interest costs and bring on board some people known for savvy investments.
Learning’s stock has fallen amid concern the educational software company is being squeezed by too much debt and declining demand for its products.
Its shares Tuesday gained $1.25, to $12.75, but are down from a high of $51.75 in September 1995.
Lee, Bain and Centre will buy a $150 million issue of Learning’s 5.5 percent senior convertible/exchangeable notes from Chicago-based Tribune Co., the company’s largest shareholder.
The financiers will pay about $123 million, then surrender the notes to Learning. They will receive convertible participating preferred stock with a principal amount of $150 million, and three seats on Learning’s board.
