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HarperCollins to Acquire Harlequin

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HarperCollins will buy romance publisher Harlequin for C$455 million, according to Publishers Weekly, pending approval from both the U.S. and Canadian governments and Canada’s Heritage Department. The deal is schedule to close in the third quarter of 2014. 

 

HC CEO Brian Murray said his team has been “in touch” with Canadian authorities, and is prepared to go through the approval process.

Murray plans to let Harlequin operate as a standalone division within HC. Harlequin CEO and publisher Craig Swinwood will remain in his current position, and report to Murray. Harelquin will also stay in its Toronto offices.

The sale would give HarperCollins a boost in global presence, according to Murray.  About 40% of Harlequin’s revenue comes from titles that are published in languages other than English. Thus, HC will use the Harlequin international infrastructure to offer its authors the opportunity to be published in as many as 30 languages. 

PW reported that HC will focus on investing in Harlequin, rather than looking for operating efficiencies. While HC generated more effiiciencies than it expected when it bought Thomas Nelson and merged it with Zondervan to form HarperCollins Christian Publishing, Murray said Harlequin “is a different company,” and again stressed its international reach. “We will be focused on growth,” Murray said.

Harlequin has long had among the best operating margins in trade publishing, though those declined in 2013. Revenue fell 6.7%% to $C397.7 million, and operating income dropped 28.9%, to C$52.0 million