KKR acquires Simon & Schuster for $1.62bn

November 2023 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

November 2023 Issue

In a transaction that takes the US publishing company private, Simon & Schuster is being sold to private equity firm KKR by global media, streaming and entertainment company Paramount Global.

Under the terms of the definitive agreement, KKR will acquire Simon & Schuster in an all-cash transaction valued at $1.62bn. 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 and has secured fully committed financing for the transaction. The investment builds on KKR’s deep experience investing in content-oriented media businesses.

“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,” said Richard Sarnoff, chairman of media at KKR. “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.”

A global leader in general interest publishing, dedicated to providing the best in fiction and nonfiction for readers of all ages, and in all printed, digital and audio formats, Simon & Schuster brings the works of its authors, which includes many of the world’s most popular and widely recognised writers, and winners of the most prestigious literary honours and awards, to readers in more than 200 countries and territories.

“All of Simon & Schuster’s executives were 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,” said Jonathan Karp, president and chief executive of Simon & Schuster. “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.”

In addition to investing in all areas necessary to establish Simon & Schuster as a standalone entity, 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.

KKR will also support Simon & Schuster in creating a broad-based equity ownership programme to provide all of the company’s more than 1600 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.

“We are pleased to have reached an agreement on a transaction that delivers excellent value to Paramount shareholders while also positioning Simon & Schuster for its next phase of growth with KKR,” said Bob Bakish, president and chief executive of Paramount Global. “The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delivering our balance sheet.”

Acting as financial adviser to Paramount is LionTree Advisors, with Shearman & Sterling LLP acting as legal adviser. Simpson Thacher & Bartlett LLP is acting as legal adviser to KKR.

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

Fraser Tennant