The Big 5 Publishers Sat Out Deal-Making in 2015

The biggest deals in the publishing industry in 2015 occurred outside of the trade sector. Unlike 2013, when the Random House–Penguin merger was completed, or 2014, when HarperCollins acquired Harlequin, the major trade houses did not make any major acquisitions last year. The biggest acquisitions in 2015 were in professional and educational publishing, led by the merger of the Macmillan Science and Education companies (excluding Macmillan’s U.S. higher education and trade properties) with Springer Science + Business. The merger was completed in May, with Macmillan parent company Holtzbrinck holding a 53% stake in the combined company, which was renamed Springer Nature.

In April, Scholastic reached an agreement to sell its educational publishing technology group to Houghton Mifflin Harcourt for $575 million. The unit includes such products as Read 180, and it had revenue of $249 million in the fiscal year ended May 31, 2014. Scholastic said it intended to reinvest the proceeds from the sale, which closed in May, in its remaining operations, which publish and distribute books and other materials for the school and trade markets.

The biggest news in trade publishing was that the owners of the Perseus Books Group were again exploring the possible sale of the company. In 2014, the sale of Perseus to the Hachette Book Group and Ingram was called off at the last minute. In September 2015, however, Perseus CEO David Steinberger said that due to continued interest in the publisher, it had hired the investment banking firm Greenhill & Co. to set up a formal process to gauge the possibility of a sale. In February, Perseus got a new general partner when Centre Lane Partners acquired control of the investment funds that own Perseus. Industry insiders believe a sale is likely to occur; companies inside and outside the industry have been in discussions about an acquisition.

There were a few notable acquisitions last year involving companies that work in the library side of the publishing business. In the biggest deal, Japan’s Rakuten conglomerate paid $410 million to acquire OverDrive, which provides digital content to libraries. In 2012, Rakuten first entered the North American digital content market with its purchase of Kobo. One of America’s largest manufacturers, 3M, got out of the library market in the year when it sold its library unit to Bibliotheca.

One of the country’s largest independent audiobook publishers, Recorded Books, was involved with two deals last year. In January, the company acquired Tantor Media, and seven months later Recorded Books itself changed hands when the private equity firm Shamrock Advisors bought the company.

Acquisition activity in book retailing included the purchase of Nebraska Book Company’s college stores by Follett Corp. In a process that spanned most of 2015, Books-A-Million was taken private by the family of executive chairman Clyde Anderson, which had owned a majority stake in the company.

The biggest deal in book retailing, however, did not involve an outright purchase. In early August, Barnes & Noble completed the spinoff of its college store division into a standalone company. Barnes & Noble Education began trading on the New York Stock Exchange on August 3. B&N retained its trade bookstore operations as well as its Nook business.

Book Publishing Acquisitions, 2015

Publishing-related Acquisitions, 2015