Paramount sells Simon & Schuster to KKR for $1.62 billion

Paramount introduced a deal Monday to promote Simon & Schuster, dwelling to Stephen King, Colleen Hoover and plenty of bestselling nonfiction authors, to the personal funding big KKR for $1.62 billion solely months after a $2-billion-plus sale to publishing big Penguin Random Home was nixed final October.

The businesses introduced the all-cash settlement on Monday. “We’re happy to have reached an settlement on a transaction that delivers wonderful worth to Paramount shareholders whereas additionally positioning Simon & Schuster for its subsequent section of development with KKR,” mentioned Bob Bakish, president and CEO of Paramount International.

After the deal closes, Simon & Schuster will develop into a standalone personal firm with Jonathan Karp, president and CEO, and Dennis Eulau, COO and CFO, nonetheless on the helm. KKR additionally introduced plans to assist the launch of a broad-based fairness possession program to supply the writer’s greater than 1,600 staff a possibility to personal shares within the firm.

The sooner sale to Penguin Random Home was blocked by a federal choose who dominated that the proposed merger would violate antitrust legal guidelines by having the potential to “considerably” reduce competitors “available in the market for the U.S. publishing rights to anticipated top-selling books.”

Whereas this may doubtless nonetheless be an industry-shaping deal, the choice to promote to a purchaser outdoors of the “Large 5” publishers — which embrace Penguin Random Home, Macmillan, HarperCollins and Hachette E book Group — might guarantee the brand new deal goes by way of with out Justice Division intervention.

“Simon & Schuster’s almost 100-year historical past is a testomony to the enduring worth of artistic expression by way of the written and spoken phrase,” mentioned Ted Oberwager, who leads the gaming, leisure, media and sports activities verticals inside KKR’s Americas Personal Fairness enterprise, in a press release. “We’re thrilled to speculate behind Jon and the immensely gifted group at Simon & Schuster to assist their mission of delivering marquee content material to readers all over the world.”

Richard Sarnoff, chairman of media at KKR, added, “We see a compelling alternative to assist Simon & Schuster develop into a good stronger associate to literary expertise by investing within the growth of the corporate’s capabilities and distribution networks throughout mediums and markets whereas sustaining its 99 12 months legacy of editorial independence. We additionally imagine the chance to create an possession tradition inside one of many world’s high publishers has monumental potential to create worth for all of Simon & Schuster’s stakeholders.”

In a letter to Simon & Schuster staff, Karp defined that discussions with KKR had been initiated this spring. He emphasised the potential for development, the promise of elevated funding and the fairness deal.

“In the meantime, it’s enterprise as common for all of us,” Karp famous within the letter. “As you’ve got finished so properly all through this course of, let’s hold our noses within the books and our deal with delivering the very best outcomes for our authors and our distribution purchasers. That focus has been integral to our success and it’s the explanation we will rejoice this end result.”