Paramount Global reached a deal to sell its Simon Schuster publishing operations to investment giant KKR for $1.62 billion in cash, the companies confirmed Monday.
We see a compelling opportunity to help Simon Schuster become an even stronger partner to literary talent by investing in the expansion of the companys capabilities and distribution networks across mediums and markets while maintainingits 99 year legacy of editorial independence, said Richard Sarnoff, advisor and chairman of media at KKR, in a statement. We also believe the opportunity to create an ownership culture withinone of the worlds top publishers has enormous potential to create value for all of Simon Schusters stakeholders.
Paramount intends to use the proceeds to create long-term value for shareholders, while also de-levering our balance sheet, said Bob Bakish, chairman and CEO of Paramount.
Simon Schuster is slated to become a standalone private company and will continue to be led by Jonathan Karp, President and CEO and Dennis Eulau, COO and CFO of Simon Schuster.KKR said it intended to extend Simon Schusters domestic publishing program across various genres and categories, expand its distribution and spur growth in international markets. Employees will be given a chance to take part in an equity ownership program.
The deal will mark the second time Paramount has tried to dispose of Simon Schuster, which has published everyone from Ernest Hemmingway to Walter Isaacson. Paramount Global had to walk away from a deal it had struck in 2021 with Penguin Random House to sell the publishing operations for $2.18 billion. The transaction was blocked by federal regulators who believed the buyer was already too big and would dominate the publishing industry. Paramount Global collected a $200 million termination fee as a result.
The deal would have created a new behemoth in a shrinking industry, where book publishing is largely dominated by Bertelsmanns Penguin Random House, Paramounts Simon Schuster, News Corp.s HarperCollins, Holzbrink Publishings Macmillan and Hachette Book Group.
Paramount gained Simon Schuster when its predecessor company, Viacom, picked it up as part of its acquisition of Paramount Communications in 1994.
Completion of the transaction is subject to regulatory approvals.