NEW YORK – McGraw-Hill said Monday that it reached a deal to sell its education arm to private equity firm Apollo Global Management LLC for $2.5 billion in cash and debt, as part of its plan to focus on its financial information businesses.

As part of the deal, McGraw-Hill will receive $250 million in Apollo debt with an annual interest rate of 8.5 percent. The acquisition includes the New York-based company's digital and traditional textbook business and other assets.

The sale is expected to close in late 2012 or early 2013. At that time, The New York-based McGraw-Hill Cos. will be renamed McGraw Hill Financial. Harold McGraw III, McGraw-Hill's current chairman, president and CEO, will head that company.