Private equity firm KKR buys Simon & Schuster for $1.62B

Private equity firm KKR is set to buy Simon & Schuster, publisher of top authors Stephen King and Bob Woodward, from Paramount Global for $1.62 billion in cash, the companies announced Monday.

While the notion of financially focused private equity having a hold in the literary world sparked reservations among some, Simon & Schuster executives said they were encouraged by KKR’s pledge to grow the nearly century-old publisher.

“All of the executives at Simon & Schuster who met with KKR came away from those conversations impressed with the depth of KKR’s interest in our business and their commitment to helping us grow, thrive and become an even stronger company,” Simon & Schuster president and CEO Jonathan Karp said in a statement. “With KKR’s support, we look forward to collaborating on new strategies that will enhance our ability to provide readers a great array of books and to give authors the best possible publication they can receive.”

Simon & Schuster will be taken private once the deal is done, and KKR is implementing an employee-ownership component that will give the publishing house’s workers a bonus once the sale is final, by the end of the year.

Paramount has been trying to sell Simon & Schuster since 2020, when it contracted with Penguin Random House owner Bertelsmann, the German media giant, for $2.2 billion. A federal judge nixed the sale last year over antitrust concerns, given increased consolidation within the book publishing industry. Among those who testified against the merger was horror writer King.

Paramount, at the time operating as ViacomCBS, had tended to view the publisher as a “discontinued operation” while it sought a new buyer, Publisher’s Weekly noted, which means its employees had been receiving “little support” even as they produced a record 2022.

Karp told employees in a letter that the equity firm’s “commitment to growth is one of the reasons I’m so glad KKR will be our next owner,” reported Publisher’s Weekly.

Simon & Schuster is known as one of New York City’s “Big Five” publishing houses, along with Penguin Random House, HarperCollins Publishing, Hachette Book Group and Macmillan. Rupert Murdoch-owned NewsCorp subsidiary HarperCollins had also reportedly been eyeing the company, though that might have posed a similar consolidation dilemma.

The Authors Guild had also opposed the Penguin merger and any others within the Big Five. On Monday, guild president Maya Shanbhag Lang cautioned against viewing cultural contributions solely through the lens of profit and loss balance sheets and dollar signs.

The guild “hopes that KKR as a private equity firm will defer to the editorial leadership at S&S, recognizing that publishing is a unique business model that requires vision and creativity in ways that don’t always justify themselves on P&L sheets,” she said in a statement obtained by The Washington Post. “In the short term, this will mean recognizing that S&S is a lean company that cannot afford to lose employees or have editorial decisions and processes undermined. In the long term, this will mean recognizing the tremendous value and prestige offered by S&S as a cultural institution and a necessary player in the publishing landscape.”

With News Wire Services