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Pearson Sees Quick DK Closing
Jim Milliot -- 4/10/00

Pearson expects to complete its purchase of Dorling Kindersley before the end of May, David Wan, president of the Pearson subsidiary Penguin Group, told PW. Following completion of the deal, DK chairman Peter Kindersley will step down from an operating role with the company, but will serve as an adviser to Pearson on various education initiatives as well as helping with the integration of DK into Penguin.

Wan said that while back-office operations will likely be consolidated, Penguin plans to keep the DK brand separate from Penguin. "We didn't buy Dorling Kindersley to fold it into Penguin," Wan explained. DK will report to Anthony Forbes Watson, head of Penguin UK, and DK's American president, Danny Gurr, will continue to report to DK's London headquarters.

For DK, Pearson paid more than 1.5 times the company's sales of $325 million, a price some thought to be high. Wan called $500 million "a fair price" for DK, given the number of parties interested in the publisher. "It will be up to us to generate value to justify the price," Wan commented. Pearson will focus on exploiting DK's content across various formats, including the Internet. According to Wan, DK's policy of offering its content free online (News, Sept. 20, 1999) has helped promote the company's books, and he has no plans to change that strategy in the near term. Pearson will also make use of DK's newly opened warehouse in the U.S. "We've just finished consolidating two warehouses, and we don't have the space to hold DK titles," Wan said.

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