Joanna Nolasco March 07, 2016
Centre Lane Partners has entered an agreement to sell Perseus Books Group’s publishing business to Hachette Book Group, the trade publishing giant that has signed the likes of J.K. Rowling, James Patterson and Nicholas Sparks. The strategic purchase, which is intended to bolster Hachette’s nonfiction and backlist publishing programs, isn’t Hatchette's first attempt to absorb part of the company. Hachette had previously pursued a split deal with book distributor Ingram wherein each would acquire separate Perseus business lines. That agreement failed in 2014 as it was “too complex”, according to a New York Times report.
If the new deal reaches a close, Centre Lane would be selling part of Perseus just a year or so after assuming ownership. Indeed, buy-side eagerness within the publishing sector appears to have picked up in recent years. According the PitchBook Platform, PE investors completed 26 sales of publishing companies to both financial and strategic acquirers in 2015, up from 21 in 2014 and doubling the 13 sales in 2013.
In line with what we’ve often seen in PE exits across sectors, strategic acquirers have been the most common purchasers of PE-backed publishing companies. In 2015, PE shops sold 18 publishing businesses to strategic buyers, which dwarfed the eight PE-to-PE deals that same year. The appetite to grow by acquisition may be especially relevant within the publishing industry, which has seen established publishing houses fight for market share with newer competitors bolstered by the rise of ebooks.
Some notable PE sellers in the publishing space include Veronis Suhler Stevenson; Angelo, Gordon & Co.; Apax Partners and Wicks Group of Companies.
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