Paramount Global and KKR announced the signing of a definitive agreement pursuant to which KKR will acquire Simon & Schuster for $1.62 billion in an all-cash transaction.
"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 CEO of Paramount Global. “The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delevering our balance sheet.”
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 CEO and Dennis Eulau, COO and CFO of Simon & Schuster.
“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,” said Jonathan Karp. “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.”
Simon & Schuster has an outstanding reputation in book publishing, in addition to sustained, strong operating performance and double-digit revenue growth in the first quarter of 2023. KKR expects to advance the company’s position as one of the world’s best-known publishers and distributors with more than 36,000 titles across adult, children, audio and international categories.
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 program 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 program 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.
“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 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,” said Ted Oberwager, a Partner who leads the gaming, entertainment, media and sports verticals within KKR’s Americas Private Equity business.
Richard Sarnoff, Chairman of Media at KKR, 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 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, including current and prior investments in Epic Games, Mediawan, Leonine Studios, Artlist, Skydance Media, BMG and RBmedia, among others.
LionTree Advisors is acting as financial advisor and Shearman & Sterling LLP is acting as legal advisor to Paramount. Simpson Thacher & Bartlett LLP is acting as legal advisor to KKR.