Scholastic Corp has announced that it is selling its Educational Technology and Services business to Houghton Mifflin Harcourt Company.

Houghton Mifflin is acquiring the business in a deal of $575 million in cash. This deal is going to help Houghton in offering services and curriculum that are driven toward student performance assessment. It will also help the student obtain the required skills in a classroom setting.

It is also expected that this step will help Houghton in savings of between $10 and $20 million in operational costs. According to Linda Zecher the CEO at Houghton, investors have given the company green light to make the deal, because it looks profitable for them.

According to Zecher, this step will play a vital role in the growth of the customer base of the company and also help in additional stock repurchases. According to Houghton, it is expected that the deal will be finalized during the second quarter of this year.

On December 31 of 2014, cash and equivalents of Houghton increased to $743 million a jump of 75% from the previous year. Back in 2012, the company announced bankruptcy, but emerged from the bankruptcy just one year later.

According to Scholastic, it will concentrate on the publishing children’s books, which is its core. The publisher based in New York, Scholastic, published the whole Harry Potter series. According to the company, this step will help them to make their firm more streamline and to focus on its business that deals with teachers and schools. Houghton is going to spend about $370 million into the publishing of children’s books, classroom books and other scholastic materials.

“Scholastic has built a global business around the guiding principle of promoting school-based reading and learning. This is an exciting time for our businesses with a renewed focus on books and reading in schools and at home”, said Richard Robinson, Chairman, President and Chief Executive Officer.