KKR Closes Deal to Buy Simon & Schuster (2024)

The private equity firm KKR completed its acquisition of Simon & Schuster, one of the biggest and most prestigious publishing houses in the United States, on Monday, marking a major shift in the publishing industry.

Simon & Schuster’s previous owner, Paramount, agreed to sell the publisher to KKR in August for $1.62 billion, making KKR, which has been expanding its media holdings, a major player in the book business.

When the deal was announced, executives at Simon & Schuster said they were optimistic about the firm’s plans, which included expanding the publishing house’s business.

“They plan to invest in us and make us even greater than we already are,” Jon Karp, the chief executive of Simon & Schuster, said in a previous interview with The New York Times. “What more could a publishing company want?”

Many in the industry were also encouraged by the involvement of Richard Sarnoff, an adviser to KKR on its media deals. Sarnoff is a well-known figure in publishing, and previously held positions at Bertelsmann, the company that owns Penguin Random House, and served as chairman of the Association of American Publishers, a trade group.

KKR also plans to introduce a profit-sharing model that will give Simon & Schuster employees an ownership stake in the company, an usual perk in publishing. KKR has used the program, which it designed to increase engagement among employees, at companies like the audiobook publisher RBMedia, which KKR acquired in 2018 and sold this year.

“Although many of us already feel ownership of our work, by sharing in ownership of the company itself, we will be a magnet for the best publishing talent, and have more of a voice in charting our collective future,” Karp wrote in a letter sent to employees on Monday.

For Simon & Schuster, which is nearly 100 years old and publishes powerhouse authors like Stephen King, Colleen Hoover and Bob Woodward, the deal is closing at a time when the company’s profits have been stronger than those of most of its competitors.

Closing the deal also ends a long and tumultuous process that began when Paramount (then called ViacomCBS) put the company up for sale in 2020. An agreement was reached to sell Simon & Schuster to its rival Penguin Random House, the country’s largest book publisher, for $2.18 billion. The deal fell apart after the Biden administration challenged the sale in court on antitrust grounds.

With a private equity owner, Simon & Schuster is likely to see more investment in its business than it has during its recent years in limbo. KKR has said it plans to accelerate Simon & Schuster’s growth in international markets, grow into new genres domestically and expand its distribution business.

At the same time, there are aspects of the marriage that could prove tricky. Publishing is unpredictable and moves slowly, as books can take months or years to gestate, while private equity firms tend to want to see rapid growth and profitability.