Posted by: bluesyemre | January 4, 2022

Big Deals Highlighted 2021 Acquisitions

Even as Penguin Random House fights with the Department of Justice to win approval for its $2.18 billion purchase of Simon & Schuster, the consolidation beat in publishing continued in 2021 with the consummation of some of the biggest deals in several years. The biggest acquisition came in the information and library publishing market, where London-based Clarivate bought ProQuest for $5.3 billion. (The deal did not included Bowker, which remains part of Cambridge, a separate unit of ProQuest.) The combined company has over 11,000 employees, with 45,000 customers in over 200 countries, and Clarivate’s 2022 revenue is projected to be between $2.87 billion and $2.93 billion. The deal was opposed by the advocacy group SPARC, which represents more than 240 academic and research library members, who said the combination “pushes this market to the brink of a monopoly.”

The second billion-dollar deal was Platinum Equity’s $4.5 billion purchase of McGraw Hill, a purchase that came eight years after Apollo Global Management acquired MH for $2.4 billion. The acquisition also took place about one year after a proposed merger between MH and Cengage fell through after running into opposition from the Justice Department.

The trade side of the business had two significant deals in the year. The biggest was HarperCollins’s acquisition of the trade division of Houghton Mifflin Harcourt for $349 million. HMH sold the trade group, which had revenue of $192 million in 2020, to focus on its efforts as a technology learning company. In September, Hachette Book Group completed its purchase of Workman Publishing for $240 million. With sales of $134 million, Workman was one of the largest independent trade publishers remaining in the U.S. The acquisition was HBG’s sixth in the last eight years.

The year also saw the downsizing of Follett Corporation. In late summer, the company sold its K–12 software and content division, Follett School Solutions (FSS), to the investment firm Francisco Partners. The sale came after a failed attempt by Follett to enter the school book fair business and the determination by Follett that if FSS was to expand in the educational technology space it needed additional capital. The FSS deal was Francisco Partners’ second purchase in 2021 in the educational technology business, having acquired Ingram Content Group’s VitalSource digital learning platform in the spring.

Approximately two months after completing the sale of FSS, Follett sold Baker & Taylor to an investment group put together by the wholesaler’s CEO and president, Aman Kochar. The deal involved all of B&T’s related businesses, which include Baker & Taylor Publisher Services, Baker & Taylor UK, collectionHQ, and James Bennett. With the sale, Follett’s business is now centered on Follett Higher Education.

Another newly created equity group, led by veteran publishing executive David Steinberger, was assembled to acquire Open Road Integrated Media. Formed in 2009 by onetime HarperCollins CEO Jane Friedman, Open Road was acquired for a purchase price reported to be between $60 million and $80 million, and had annual revenue approaching $50 million.

The audiobook industry was the focus of several deals in 2021. In acquisitions that were announced on consecutive days in November, the Swedish audio streaming subscription service giant Spotify announced it had reached an agreement to acquire Ohio-based digital audiobook distributor Findaway. The purchase will give Spotify a greatly expanded presence in the American audiobook market. The next day, Storytel, the international audiobook streaming company based in Sweden, announced it was buying Audiobooks.com from the private equity firm KKR, owner of audiobook publisher RBmedia. The purchase marked the Stockholm-based firm’s entry into the English-language audiobook market.

While KKR was selling Audiobooks.com, it backed RBmedia’s purchases of Booka, a Barcelona-based audiobook publisher and producer, and of the audiobook publishing business of McGraw-Hill Professional, a deal that added about 400 business audiobook titles to RBmedia.

The audiobook market was not the only business Swedish companies took interest in last year. In December, the Embracer Group, a Swedish video game development company, bought Dark Horse Media, which owns and operates more than 300 properties, including graphic novels and comics. In another late-year deal involving an international company buying an American company, U.K.-based Bloomsbury Publishing bought California academic and reference publisher ABC-CLIO for $22.9 million; ABC-CLIO had 2020 sales of $14.7 million.

The distribution business had a major shake-up with Independent Publishers Group’s acquisition of U.K.-based United Independent Distributors. The purchase makes IPG the largest independent distributor in the U.K. and closes the gap between IPG and Ingram Publisher Services in the U.S. In explaining his reasoning for the deal, IPG CEO Joe Matthews pointed to industry consolidation. “Book distribution rewards scale,” Matthews said. “In this era of consolidation across our industry, IPG will be big enough to offer clients a complete solution yet remain much smaller than our billion-dollar competitors.

A transaction made by the founder of a large educational and research publisher was aimed at keeping her company out of the hands of a larger competitor. SAGE Publishing founder and owner Sara Miller McCune signed over her voting shares and control of the $400+ million company to the SAGE-SMM Trust.

https://www.publishersweekly.com/pw/by-topic/industry-news/publisher-news/article/88202-big-deals-highlighted-2021-acquisitions.html


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