Paramount announces sale of Simon & Schuster for $1.62 bn
Source: AFP
Paramount Global said Monday it had reached an agreement to sell Simon & Schuster, a top US publisher, to private equity firm KKR for $1.62 billion.
The proposed sale, if it goes through, will end a years' long effort to sell the prestigious publishing house, whose authors include Stephen King, Colleen Hoover and Bob Woodward.
"We are pleased to have reached an agreement on a transaction that delivers excellent value to Paramount shareholders while also positioning Simon & Schuster for its next phase of growth with KKR," Paramount Global president and CEO Bob Bakish said in a statement Monday.
After the purchase -- which Paramount said will be made entirely in cash -- Simon & Schuster will become a "standalone private company," according to the statement.
The publisher will retain its existing leadership.
"With KKR's support, we look forward to collaborating on new strategies that will enhance our ability to provide readers a great array of books and to give authors the best possible publication they can receive," Simon & Schuster president and CEO Jonathan Karp said in the statement.
The deal announced Monday is less than last year's tentative plan to sell the company to Penguin Random House for $2.18 billion, which foundered amid regulatory concerns.
US District Court Judge Florence Pan, in her ruling, said the government had convincingly shown that the merger would substantially lessen competition "in the market for the US publishing rights to anticipated top-selling books."
Paramount at the time made clear its intentions to continue to look for a buyer for the unit, calling it "a non-core asset."
'Big Five'
Also in the running for a potential purchase were fellow publisher HarperCollins, held by Murdoch-owned News Corp, and investor Richard Hurowitz, backed by Abu Dhabi sovereign wealth fund Mubadala Investment, the Wall Street Journal reported last week.
Other big-name writers who have published with Simon & Schuster, which was founded in 1924, include Doris Kearns Goodwin and Britain's Prince Harry.
The publishing house releases around 2,000 books per year, and owns a back catalog of about 36,000 titles for adults and children, plus audio works.
It employs more than 1,600 people.
Simon & Schuster is the fourth largest of America's "Big Five" publishing companies, which also include HarperCollins, Hachette Book Group USA and Macmillan Publishers.
In after-hours trading Monday, shares of Paramount Global jumped 4.54 percent to $16.82, while KKR shares remained relatively stable, up 0.03 percent to $61.83.
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Source: AFP
