The private equity firm KKR on Monday completed its acquisition of Simon & Schuster, making it a standalone private limited liability company. The sale marks a a major shift in the publishing industry, makng S&S the only independent major trade publisher in the US.
Paramount, S&S’s previous owner, agreed to sell the publisher to KKR in August for $1.62 billion in an all-cash transaction.
“This marks the first time since 1975, when Simon & Schuster was sold to Gulf + Western, that we will stand on our own and not as part of a larger media conglomerate,” S&S president and CEO Jonathan Karp said in a letter to staff. “With KKR’s resources and support, we intend to become an even stronger company and a more dynamic force in our industry, while still maintaining our well-established record of editorial excellence and independence….
“There is no question that this is an exciting moment for us–both a return to our roots as an independent, standalone company and an opportunity for all of us to forge a new path together. We have arrived here because of your unceasing focus and dedication to doing the best for our authors and their books, and I know that we will build on that legacy going forward.”
Karp also emphasized that KKR is instituting employee ownership, which he said will help make the company “a magnet for the best publishing talent” and lead to staff having “more of a voice in charting our collective future.”
Karp added that KKR are experts in creating transitions with minimal disruption to the day-to-day life of employees. Most of these changes will not even be noticeable, he noted.
In the official announcement about the completion of the deal, Ted Oberwager, a partner who leads the gaming, entertainment, media and sports departments in KKR’s Americas private equity business, said, “Today Simon & Schuster and KKR are officially one family. The company is in a strong position to capture the opportunity ahead, and we look forward to building on Simon & Schuster’s reputation for delivering engaging and compelling books to readers all over the world.”
Richard Sarnoff, chairman of media at KKR, added: “In recent years, Simon & Schuster has built an impressive track record of commercial success to go along with its 100‐year legacy of publishing excellence. We are thrilled to work on the next phase of Simon & Schuster’s growth with Jon and the entire Simon & Schuster team. As part of that we are delighted employees will now have the opportunity to participate in the benefits of ownership in the company.”
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds. (Source: Wikipedia)