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Mergers & Acquisitions

The intense M&A activity from 2013 and 2014 carried over into 2015, though the exchange of domestic trade publishers was modest so the common perception was of fewer mergers. The biggest US trade deal — the sale of the Perseus Books Group, this time likely for real — was still pending at year end and likely to close in early 2015. (And there are more trade deals in the works no one has heard about yet.) And the next biggest trade deal was international, with Mondadori spending months winning acceptance of their bid to buy their largest rival in Italy, RCS Media Group, though the deal is awaiting government approval. (In the meantime, two units of RCS bought themselves out rather than facing absorption by “Mondazoli.”)

The dramatic action — many billions of dollars worth — was in education publishing, so it received less attention. The year began with the surprise cashless merger between two giants, Macmillan Science and Education and Springer Science. HMH paid big for Scholastic’s EdTech business, and McGraw-Hill Education hopes to follow HMH’s path with an IPO, though it may be delayed as the market finds it footing. Bertelsmann continued to invest hundreds of millions more in education, even as News Corp. admitted defeat with Amplify, taking a big write-off and then selling what was left.
The college bookstore market consolidated to two players, as Follet bought Nebraska Book’s retail division and Barnes & Noble Education was spun off as a separate company.

In broader retail/wholesale, the Anderson family finally took Books-a-Million private — for a paltry $21 million to buy out public shareholders. Baker & Taylor made a strategic retreat from some sectors of their business, and OverDrive executed a big sale.

Digital sales (and deaths) were significantly more modest than in previous years, as interest the sector fades.

 
EDUCATION
Bertelsmann Education > HotChalk ($230 million); minority investment
Bertelsmann Education > RediLearning (reportedly “medium double-digit million US dollar sum’)
Management team > Amplify Insight and Learning; News Corp. takes a $371 writeoff against their education division and then sells what’s to management and investors
McGraw-Hill Education > Files for IPO
Follett > Nebraska Book Company college retail division (Neebo)
Sandbox Partners > Pearson’s Family Education Network
Houghton Mifflin Harcourt > Scholastic’s Education Technology and Services business ($575 million)
Barnes & Noble Inc. > Barnes & Noble Education.; the company splits in two, spinning off BNED as a separate, publicly-traded unit
Macmillan Science and Education > Springer Science (proposed 53/47 merger, with annual group sales of about 1.5 billion euros)

TRADE
Rowman & Littlefield > Stackpole Books
Centre Lane Partners > Perseus LLC funds (which include the Perseus Books Group); then PBG is put for sale
Shamrock Capital Advisors > Recorded Books
Rowman & Littlefield > Gooseberry Patch
Rowman & Littlefield > Chase’s Annual Events
Egmont USA > Closed; then list was sold to Lerner Publishing
Recorded Books > Tantor Media (reportedly “about $25 million”)

INTERNATIONAL
Mondadori > RCS Media (127.5 million euros, awaiting regulatory approval)
HarperCollins Italia > Harlequin Mondadori (Buys out 50 percent share in joint venture for 6.7 million euros and forms Harper Italia)
Hachette UK (John Murray Press) > Nicholas Brealey Publishing
Vigmostad & Bjørke > Schibsted Forlag
Quarto > The Ivy Press (Up to £1.3 million plus up to £200,000 of debt)
Hachette Livre > Kero

RETAIL/WHOLESALE
One Equity Partners/Bibliotheca > 3M North American Library Services divisionMedia
Anderson family > Books-a-Million (taken private at $3.25/share, or $21 million)
Booktopia > Penguin Random House Australia’s Bookworld (former Borders UK and Angus & Robertson assets)
ReaderLink > Baker & Taylor Merchandise Services 
EBSCO > YBP

DIGITAL
Ingram Content Group > Aer.io
Frankfurt Book Fair > IPR License (takes minority stake)
Scribd > Librify
Media-Saturn > Textr (purchased in bankruptcy liquidation)
Google > Oyster (Acqui-hire; Oyster is closed)
Rakuten > OverDrive ($410 million); majority owned by Insight Venture Partners

OTHER
General > Meredith Corporation ($2.4 billion, plus $772 million of debt)
RR Donnelley > Courier Corp. ($261 million); Donnelley announced in August the company will split into 3 separate public entities by the end of 2016)
2014
2014 was a busy year for publishing M&A from start to finish, beginning with deals for Bookish, Cookstr, CourseSmart and the Sony Reader Store and continuing strong in November with one of the biggest deals in dollars and yet one of the most unheralded: Bertelsmann’s purchase of Relias Learning for over $500 million. In digital, we saw everything from start-ups that ran their course to roll-ups of digital publishing lists and still more sizable investments from Amazon.

In publishing, a number of well-known houses changed hands — and still more are on the market as we speak, most notably (and most publicly) Egmont USA, which was put up for sale in October. Yet one of the biggest and most complicated deals of the year was the one that never closed: Hachette Book Group’s attempt to purchase Perseus, intending to keep the publishing imprints for itself and sell the distribution business to Ingram.

The talent agency landscape is officially dominated by private equity groups now, as the large Hollywood agencies compete with each other for scale (and continuing to pick up more literary agencies and literary representation talent as they go).

PUBLISHING
News Corp. > Harlequin $415 million (C$455 million)
HarperCollins Christian > Thomas Nelson Brasil (buys majority ownership from Ediouro)
Tinicum > F+W
F+W > New Track Media
Penguin Random House > Santillana $100 million (72 million euros)
Salem Communications > Eagle Publishing (including Regnery) $8.5 million guaranteed, with up to another $8.5 million in earnouts over three years
Rowman & Littlefield > Globe Pequot Press
IAC > The Princeton Review
Hachette Book Group > Black Dog & Leventhal
Fox Chapel Publishing > Creative Homeowner $1 million (bought by Courier in 2006 for $37 million)
Rizzoli > Welcome Books
Recorded Books > HighBridge Audio (from Workman Publishing)
Wasserstein & Co. and others > Recorded Books (Haights Cross)
Baker Publishing > Regal Books
National Entertainment Collectibles Association > Hastings $21.4 million
Chicago Review Press > Academy Chicago Publishers
Arcadia Publishing > The History Press (US)
Skyhorse Publishing > Good Books ($1.575 million at bankruptcy auction) [Skyhorse sells Mayo Clinic titles to Perseus]
Hachette Book Group > Perseus Books Group [deal was cancelled]
Ingram Content Group > Perseus Distribution [deal was cancelled]

DIGITAL
Amazon > Rooftop Media
Amazon > ComiXology
O’Reilly Media > Safari Online (bought Pearson’s 50 percent stake; Pearson reported a £40 gain on this sale, along with the disposition of their stake in CourseSmart)
Vook > Coliloquoy‘s publishing list
Vook > Byliner.com
Open Road > Premier Digital
Open Road > E-Reads
Start Publishing > Cleis Press
Start Publishing > Whiskey Creek Press
Apple > BookLamp ($10 to $15 million, reportedly)
Chronicle > I See Me!
Harper Christian > Olive Tree Bible Software
OverDrive > TeachersNotebook.com
IAC/Atavist Inc. > Atavist Books (will absorb assets when it closes)
Wattpad > Red Room (closed)
Dropbox > Readmill (acquired for the staff, rumored at $8 million; closed)
Mondadori > Anobii
Ingram > CourseSmart
Kobo > Sony Reader Store (not purchased outright, but Kobo takes over Sony’s customers in North America, the UK, Germany, Austria and Australia)
Investor group > CodeMantra
Macmillan > Cookstr
Zola Books > Bookish
Kensington > Lyrical Press

INTERNATIONAL
Arnoldo Mondadori Editore > Mondadori Libri (parent spun off book publishing assets to enhance M&A possibilities)
Hachette Livre > Azbooka-Atticus (increases stake to 49%)
Little Brown UK > Constable & Robinson
Hodder & Stoughton > Quercus $21.25 million (£12.6 million)
Octopus > Ilex Press
Apa Publishing > teNeues Digital Media (Cool Cities books)
Etan Ilfeld > Angry Robot, Watkins, Nourish (from Osprey Group)
Bloomsbury > Osprey Group £3.2 million in cash; £1.4 million in stock
Seni Glaister, Endless LLC, management > The Book People
Droege International Group > Weltbild
Allen and Unwin > Atlantic Books (controlling share)

AGENCIES
William Morris Endeavor > IMG (approximately $2.4 billion; announced in 2013 but closed in May 2014)
TPG > CAA (increases stake to controlling interest, for approximately $230 million)
UTA > N.S. Bienstock
AGI > Vigliano Associates

EDUCATION
Bertelsmann> Relias Learning ($540 million, reportedly)
Wiley > CrossKnowledge $175 million
Wiley > Profiles International $51 million

BUYBACKS
Barnes & Noble > Microsoft’s stake in Nook Media LLC $62.5 million in cash; $62.5 million in stock
Barnes & Noble > Pearson’s stake in Nook Media LLC $13.75 million in cash; $13.75 million in stock

 

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