PE Firm KKR Advances Towards $1.65B Deal for Simon & Schuster, AI Threats to Publishing Industry Loom Large

The private equity firm KKR & Co Inc KKR is in talks to snap Simon & Schuster for $1.65 billion.

If the sale goes through, it would conclude Paramount Global PARA attempt to sell the publisher for more than a year after a  federal judge quashed a previous deal with Penguin Random House in 2022.

Other bidders included HarperCollins Publishers and investor Richard Hurowitz, backed by Mubadala Investment Co, the Wall Street Journal reports.

Also Read: High-Stakes Showdown: Publishers Insist on Billions in Payments as AI Platforms Grapple with Business Model

Simon & Schuster, founded in 1924, has been home to famous authors like Ernest Hemingway and F. Scott Fitzgerald.

The price KKR is discussing is lower than the $2.2 billion valuation in the previous Penguin deal.

Simon & Schuster had a strong 2022, with 19% revenue growth to $1.18 billion and 16% operating profit growth to $248 million. It is the third-largest U.S. book publisher by market share, with an 8% share.

The new deal comes amid declining print book sales and new threats from generative AI technology.

Paramount is also trying to sell a majority stake in BET Media Group.

Top publishers evaluated the possibilities of a coalition as AI threatened their revenue and online authority. They aimed to avoid repeating the mistakes of the social media era when they gave away content for free. 

Price Action: PARA shares traded higher by 0.40% at $15.15 premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.