Private Equity Firm KKR in ‘Advanced Talks’ to Buy Simon & Schuster for $1.65 Billion (Report)
Paramount Global is in advanced talks to sell Simon and Schuster, the nation’s No. 3 publishing house, to private equity giant KKR for $1.65 billion, The Wall Street Journal reported Friday.
The news confirms earlier reports that the media conglomerate was looking to private equity to take over the book publisher after a federal judge nixed its earlier plan to sell it to rival Penguin Random House.
The price tag is, however, well below the $2.2 billion Penguin would have paid in a deal struck in 2020 by Paramount predecessor ViacomCBS.
Paramount pocketed a $200 million termination fee after that deal fell through.
Other bidders for the publisher behind Stephen King, bestselling authors like TikTok influencer Colleen Hoover and thriller writer Brad Thor included News Corp.’s HarperCollins Publishers, and investor Richard Hurowitz, backed by Abu Dhabi-based sovereign-wealth manager Mubadala Investment Co., The Journal reported.
Simon & Schuster, with more than 30 divisions, is also a major player in political books, publishing titles by former National Security Adviser John Bolton, former President Trump’s niece Mary Trump and former Vice President Mike Pence in recent years.
The company’s sales have not suffered from the turmoil over its fate, even as broader book sales declined.
In the first quarter of 2023, the publishing house’s sales rose 19% to $258 million, Paramount Global said, producing $45 million in net earnings. The company, due to report second-quarter results on Monday, considers the business a “discontinued” operation, and has said it intends to use proceeds from the sale to pay down debt and support its video efforts.
CFO Naveen Chopra said at a conference in June the deal could close before the end of the year. “But whenever that happens, it will also be a factor in helping continue to reduce leverage.
KKR, the second-largest private equity firm in the country with more than $500 million in assets, has previous media investments, including in Axel Springer, the German media conglomerate that owns Politico and Business Insider, The Journal noted. Last month, it agreed to sell audiobook publisher RBmedia, which it has owned for about five years, to private-equity firm H.I.G. Capital for an undisclosed amount.
Investors appeared positive on the news. With the broader markets moving higher, Paramount Global shares gained 38 cents, or 2.5%, to $15.46 in late morning trading. The stock started the day down about 13% since the start of the year.
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