The greater media industry learned Monday that investment firm KKR is acquiring publisher Simon & Schuster from Paramount Global for $1.62 billion in an all-cash transaction.
After closing, Simon & Schuster will become a stand-alone private company. It will continue to be led by Jonathan Karp, president and CEO, and Dennis Eulau, COO and CFO of Simon & Schuster.
The transaction is subject to customary closing conditions, including regulatory approvals.
KKR hopes 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,” says Richard Sarnoff, chairman of media at KKR.
In addition, KKR will help Simon & Schuster create an equity ownership program for the company’s 1,600+ employees.
KKR claims that its portfolio companies have awarded billions of dollars of total equity value to over 60,000 non-management employees in over 30 companies.
“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,” says Ted Oberwager, a partner who leads the gaming, entertainment, media and sports verticals in KKR’s Americas Private Equity business.
For its part, Paramount will gain “additional financial flexibility and greater ability to create long-term value for shareholders, while also delivering our balance sheet,” says Bob Bakish, president and CEO of Paramount Global.
KKR is conducting the purchase mostly through its America Fund XIII and says it has fully committed financing.
LionTree Advisors is acting as financial advisor to Paramount, and Shearman & Sterling LLP is legal advisor . Simpson Thacher & Bartlett LLP is serving as legal advisor to KKR.