Publishing company Simon & Schuster has been purchased for $1.62 billion by private investment firm Kohlberg Kravis Roberts (KKR), according to a joint statement released by the firm and parent company Paramount Global on Monday.
According to the press release, the purchase means the publisher will become its own standalone company. Jonathan Karp and Dennis Eulau will maintain their positions of president and COO, respectively.
According to reporting from Bloomberg, KKR has also lined up debt financing to help pay for the buyout. A group of banks, led by Jefferies Financial Group, will be providing a loan of roughly $1 billion to fund the purchase.
Paramount has been attempting to offload the book publisher since March 2020, citing a desire to focus more on video and streaming. Initially Simon & Schuster was meant to be sold to fellow book publisher Penguin Random House for $2.2 billion, but the deal was canceled after being blocked by a federal judge over monopoly concerns.
Jim Milliot, editorial publisher of Publisher’s Weekly, said in a statement to NPR this new deal is unlikely to face the same legal issues. He said the primary concern from that deal, reducing the “big five” publishers down to four and making Penguin the largest of those left, wasn’t present in this current deal.
The investment firm has made a series of purchases over the last few years across a variety of industries. In 2020, KKR purchased digital reading platform OverDrive.
They were also part of the group firms, including Bain Capital and Vornado, which purchased toy story Toys “R” Us in 2005. Following the $6.6 billion purchase, the group then offloaded $5 billion in debt onto the company, eventually causing it to declare Chapter 11 bankruptcy in 2017.
Despite Paramount wanting to stick to its video production business, Simon & Schuster still remains the third largest book publisher in the U.S. According to Publisher’s Weekly, the company posted a record $1.1 billion in revenue in 2022.
Simon & Schuster was originally acquired by Paramount, then still Viacom, in 1994. The publisher itself was originally founded in 1924, just short of 100 years ago.
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