Finding Growth in Niches: 2018 Book Biz Mergers and Acquisitions

In a year of mostly niche acquisitions in publishing, the biggest deal involved yet another example of consolidation in the printing industry: Quad/Graphics’s all-stock offer to buy LSC Communications. The purchase, valued at $1.4 billion, will unite the country’s two largest book printers and is expected to close in mid-2019.

Among the larger niche acquisitions, educational services publisher Kaplan Test Prep acquired the test prep, study aid, and foreign language assets of Barron’s Educational Series, in addition to purchasing the Barron’s brand name. Barron’s retained about 1,350 trade titles, and its trade list is being published under a new trade name: B.E.S. Publishing.

A couple of publishers were involved in niche divestitures. Early in the year, the American Management Association sold its trade book assets and the Amacom Books name to HarperCollins. HC put the 600 titles it acquired in its HarperCollins Leadership imprint, which is run out of the company’s Nashville office. And in November, Prometheus Books sold its two genre imprints to Start Publishing. Publisher Jonathan Kurtz explained the sale by saying he wanted to return the publisher to its nonfiction roots. Prometheus expanded into fiction in 2005 with the launch of Pyr, which focuses on science fiction and fantasy novels. In 2011, it added the crime fiction imprint Seventh Street Books. Pyr has a backlist of 170 titles, and Seventh Street’s backlist stands at about 90.

The two biggest deals involving independent publishers were the purchase of Arcadia Publishing by the newly formed Lezen Acquisition and the acquisition of audiobook publisher and e-tailer RBmedia by the private equity firm KKR. Lezen was formed by former CEO of Sony Entertainment Michael Lynton and his sister Lili Lynton. Prior to joining Sony, Michael had been CEO of Penguin. He was brought into the Arcadia deal by David Steinberger, the former CEO of Perseus Books Group. The three hope to make a series of acquisitions of independent publishers. The purchase of RBmedia was overseen by onetime Random House executive Richard Sarnoff, who is now chairman of media, entertainment, and education at KKR. Commenting on the purchase, he said he is certain that there is more growth ahead for the digital audiobook market.

Several companies made more than one acquisition in the year. Rowman & Littlefield made a splash in December with its purchase of the trade book assets of the Hal Leonard Performing Arts Group. The purchase involved approximately 3,200 titles divided among five imprints: the Hal Leonard imprint (which will be rolled into R&L following the acquisition); Amadeus Press; Applause Theatre & Cinema Books; Backbeat Books; and Limelight Editions. Over the summer, R&L continued to add regional publishers to its catalogue, purchasing Pineapple Press. Last week, R&L opened a new office for the Florida-based Pineapple in Palm Beach.

Fox Chapel is another publisher that made multiple acquisitions in 2018. In July, it bought Lindauer Publishing, a publisher of about 100 needle art books. It followed up that purchase in December with the acquisition of Old Pond Publishing, a U.K.-based publisher of books for crafters, hobbyists, and DIY enthusiasts.

On the distribution side, IPG made two deals. In the larger of the two purchases, it bought Midpoint Trade Books, which added about 260 clients to IPG. The company bolstered its academic roster with the purchase of ISBS, which distributes about 60 publishers.

Another purchase of note was Abrams’s acquisition of the Overlook Press. Founded by publishing legend Peter Mayer and his father in 1971, the company was put up for sale following Mayer’s death in May. Abrams CEO Michael Jacobs said the purchase will help Abrams, best known for its illustrated works, expand its nonfiction text business.

Industry Mergers & Acquisitions, 2018