McGraw-Hill Companies said Monday it plans to split into two companies, including one built around capital markets and featuring its Standard & Poor’s ratings business.

S&P will become a part of McGraw-Hill Markets, once the split is completed.

The other McGraw-Hill business will be built around digital learning as well as teaching services and will be known as McGraw-Hill Education.

The firm has been under pressure from investors to unlock value in its holdings. The company sold its flagship BusinessWeek publication to the Bloomberg financial data and services firm, two years ago, as it began to re-evaluate its long-term structure.

As part of this restructuring, the firm also is looking to find $1 billion of cuts in corporate, administration and technology expenses, companywide.

The firm also plans to repurchase $1 billion of shares in 2011. In the third quarter to date, McGraw-Hill has repurchased 6.4 million shares for $240 million. Year-to-date, the Company has repurchased 14.1 million shares for $540.6 million.

The creation of the two companies will enhance McGraw Hill’s “strategic and financial flexibility and establish two attractive equity currencies, the company said.

“Because both companies will be sharply defined, they will create two pure-play investment opportunities and present a more transparent capital markets profile, enabling investors to better assess their value, performance and potential,’’ said Harold (Terry) McGraw III, Chairman, President and Chief Executive Officer.

Here’s the company’s rundown:

McGraw-Hill Markets: Will be led by McGraw as Chairman, President and CEO. Will leverage proprietary data and analytics platforms to provide customers with information, market insights and integrated approaches to inform decision-making on trillions of dollars of assets. Will include Standard & Poor’s, the provider of credit ratings; S&P Indices, the world’s leading index business; S&P Capital IQ, a global provider of multi-asset class data, research, benchmarks and analytics; and Platts, the leading global provider of information and indices in energy, petrochemicals and metals. Also included witll be J.D. Power and Associates, a global market research and services company, and leading franchises in the construction and aerospace industries.

McGraw-Hill Markets serves customers in more than 150 countries and expects 2011 revenues of approximately $4 billion with close to 40% from international markets.

McGraw-Hill Education: Will become an independent business operating in K-12, higher education and professional education markets. Will offer educational materials online and in print for K-12, supplemental digital services to the elementary and high-school markets, and post-secondary educational resources and digital learning systems to universities and other higher education and professional institutions and organizations worldwide.

McGraw-Hill Education expects revenues of approximately $2.4 billion in 2011. A search is underway to recruit a CEO. Robert Bahash, currently President of the Education segment, will continue as president until the new CEO has been appointed.

A replay of the company’s announcement can heard here.