By the end of the work day Tuesday, the parties confirmed with a press release the deal to sell Perseus Books Group to Hachette Book Group, with HBG having "binding commitments" to purchase all of PBG and in turn sell the sizable distribution lines to Ingram Content Group. Hachette will gain approximately 6,000 titles from the Perseus imprints, and will "make Perseus...a major new publishing division of the company." The official release is relatively scant on details, and the purchase price was not disclosed. Apparently that information will not be shared any time soon, though presumably the transaction is material enough that Lagardere will inform their shareholders at a later time.
Our special account from earlier on Tuesday prior to the signing of the deal remains both broadly accurate and pretty definitive, aside from official quotes from the participants. Refined information has made clear that Perseus's publishing revenues are approximately $95 million after a series of record years (helped by the rejuvenated joint-venture with Weinstein Books). By our revised factoring, that puts HBG roughly tied with or slightly ahead of Simon & Schuster as the third-largest North American trade publisher, with normalized annual sales of about $740 million, before taking into account the effect of the standoff with Amazon.
We're told that Hachette is not considering splicing off any of the Perseus imprints or titles into various existing HBG divisions, which we suggested was a possibility yesterday. Perseus told their employees to expect that "the vast majority of people will have jobs" under the two new owners, while acknowledging that undoubtedly some positions will be eliminated. PBG employees were promised that everyone would become the responsibility of either Hachette or Ingram (in other words no one will be left behind), and that in the event of any staff reduction their Perseus severance policy and rights will be honored. Senior staff from the acquirers will be meeting one-on-one with Perseus employees in the coming days.
In the official announcement, HBG ceo Michael Pietsch said, "We're proud and happy to welcome Perseus staff and authors to Hachette Book Group. This exciting acquisition adds a new program of extraordinary diversity, vibrancy, and strength to HBG’s portfolio of publishers. It fits our strategic goals of growth and nonfiction expansion. At the same time it significantly increases HBG’s backlist, and will expand our offerings for special markets, gift accounts, and academic markets. It also expands HBG's geographical diversity."
Perseus ceo David Steinberger adds for the record, "I am tremendously proud of my colleagues whose hard work and determination built Perseus into an innovative industry leader." He adds, "As ceo, one of my most critical responsibilities is to forge the right future for our people, our authors, our books and our client publishers. We greatly admire Hachette and Ingram as two companies with deep and long-standing commitments to the world of publishing and the written word." As we reported earlier, Steinberger we leave the company after the transaction is finalized, but will consult with HBG "for a period."
Ingram Content Group ceo John Ingram, speaking to us separately, was ready and enthusiastic to declare, "we're very excited about the opportunity." He notes "it's a big deal" for Ingram, but also "it was a difficult deal" to execute. He adds in the official release, "We’re betting on the future of the book business, and this deal is proof of Ingram’s commitment to the book industry." As we suggested in our earlier report, Ingram says "it is part of our transformation, and becoming more of a service company." He looks forward not only to "the opportunity to leverage some of the resources we have" (Lightning Source, CoreSource, etc.) on behalf of client publishers, but also to "maybe learn some things" from the Perseus staff around sales, marketing and other services to provide to publishers. We were told separately on background that the company is taking a long-term view on the possibilities, and it's more about integrating the Perseus clients into the Ingram network, and less about any immediate benefits from the additional sales volume. Ingram reaffirmed, as we reported earlier, that Lagardere Publishing ceo Arnaud Nourry played a key role in driving the complicated deal.
As we indicated earlier on background, Ingram underscored that Perseus's Jackson, TN warehouse "is going to be an important part of our future" and "we need the space." Ingram plans to expand their presence in New York City after the deal is completed and will be looking for new space, and company intends to consolidate their own Berkeley, CA office into the existing PGW office there. HBG has pledged to retain the Perseus publishing offices in Boulder, CO and Philadelphia, and will keep Perseus staff based in Cambridge but relocate them at some point to Hachette's existing Boston office.