KKR to Acquire Simon & Schuster from Paramount Global

Paramount Global and private equity firm KKR signed a definitive agreement for KKR to acquire Simon & Schuster for $1.62 billion in an all-cash transaction.

Having failed to sell Simon & Schuster to Penguin Random House (the sale was blocked due to anti-trust concerns), Paramount turned to private equity firm KKR and reached a deal on 7 August 2023. The price of $1.62 billion is less than the original sale price of $2.2 billion. According to the press release, “Simon & Schuster will 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”.

Promised are new strategies to increase the array of books and benefit authors, maintaining its position as a major book publisher—it currently publishes and distributes over 36,000 titles—in addition to extending the publisher’s U.S. activities, distribution relationships, and growth internationally. It also will offer employees the opportunity to become equity owners of the company.

Publishers Weekly commented: “The KKR deal also brings Richard Sarnoff, chairman of media at KKR, back to the heart of publishing. Sarnoff played a key role in making Random House the largest trade publisher in the country, having been one of the architects of Bertelsmann’s purchase of Random when he was CFO of Bantam Doubleday Dell.”

The deal avoids more consolidation in the publishing industry but worries some information professionals who feel concentration of ownership of their library vendors by private equity is not in their best interests.

Completion of the transaction is subject to customary closing conditions, including regulatory approvals. KKR is making its investment in Simon & Schuster primarily through its North America Fund XIII.