Paramount to sell Simon & Schuster to private equity firm KKR for $1.62bn

Paramount Global and private equity company KKR have confirmed KKR will buy Simon & Schuster for $1.62bn (£1.27bn) in an all-cash transaction.

After the closing of the transaction, Simon & Schuster will become a standalone private company and will continue to be led by Jonathan Karp, president and c.e.o., and Dennis Eulau, c.o.o. and c.f.o. KKR will create an equity ownership programme benefiting S&S employees, it was also announced. 

Karp said: "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. 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.”

KKR intends "to support numerous growth initiatives, including extending Simon & Schuster’s strong domestic publishing programme across various genres and categories, expanding its distribution relationships and accelerating growth in international markets", the announcement said.

The private equity firm will also "support Simon & Schuster in creating a broad-based equity ownership programme to provide all of the company’s more than 1,600 employees the opportunity to participate in the benefits of ownership after the transaction closes. Since 2011, KKR portfolio companies have awarded billions of dollars of total equity value to over 60,000 non-management employees across more than 30 companies", it said.

Ted Oberwager, partner at KKR, said: “Simon & Schuster’s nearly 100-year history is a testament to the enduring value of creative expression through the written and spoken word. We are happy to invest behind Jon and the immensely talented organisation at Simon & Schuster to support their mission of delivering marquee content to readers around the world.”

Richard Sarnoff, chairman of Media at KKR, and a previous executive vice-president and c.f.o. at Random House, added: “We see a compelling opportunity to help Simon & Schuster become an even stronger partner to literary talent by investing in the expansion of the company’s capabilities and distribution networks across mediums and markets while maintaining its 99 year legacy of editorial independence.

"We also believe the opportunity to create an ownership culture within one of the world’s top publishers has enormous potential to create value for all of Simon & Schuster’s stakeholders.”

Completion of the transaction will be subject to regulatory approvals.