- M&A
- November 1, 2023
- 3 minutes read
PE Firm KKR Closes Buyout Of Book Publisher Simon & Schuster
KKR & Co. Inc. (NYSE: KKR), an American private equity firm, has closed its acquisition of Simon & Schuster, a…
KKR & Co. Inc. (NYSE: KKR), an American private equity firm, has closed its acquisition of Simon & Schuster, a “big five” book publishing firm. KKR paid $1.62bn in cash to buy the firm from media conglomerate Paramount Global (NASDAQ: PARA).
Paramount previously struck a deal to sell Simon & Schuster to rival book publisher Penguin Random House. However, the U.S. Justice Department sued and successfully blocked the deal on antitrust grounds.
Penguin Random House had agreed to acquire Simon & Schuster for $2.2bn in cash in a deal that would have trimmed the “big five” publishers to the “big four.” However, the acquisition was opposed by a government antitrust lawsuit and blocked by a federal judge after a three-week trial. Penguin paid Paramount Global a $200mn breakup fee.
KKR swooped in with a lower offer to Paramount Global, which long sought to sell non-core assets to reduce debt and preserve cash.
- KKR said it will implement a “broad-based” employee ownership program at Simon & Schuster. Since 2011, the private equity giant has implemented such a program at more than 30 portfolio companies, generating significant payouts for employees in some cases.
- For example, KKR bought garage door maker C.H.I. in 2015 and sold it to steel manufacturer Nucor for $3bn in cash seven years later, or 10 times its original investment. 800 C.H.I. employees shared $360mn in proceeds, with the average hourly worker receiving $175k and the most tenured getting $750k+.
Simon & Schuster will retain its leadership team under KKR, led by chief executive Jonathan Karp.
KKR is one of America’s top-five private equity firms by assets under management (AUM). It managed over $500bn of assets as of June 2023.
