PW: Hachette Buys Majority Stake in U.K.'s Orion Group

Word of the arrangement came from Orion CEO Anthony Cheetham, who formed the group seven years ago with his wife Rosemary and Peter Roche, now COO and managing director. Terms call for Hachette to acquire the equity stakes of Orion's three venture capital investors, representing about 70%. The Cheethams and Roche will each retain substantial equity stakes, along with the 50 Orion employees who hold shares or options, for the remaining 30%.

"This is good news for Orion," Anthony Cheetham said. "We now have a strategic partner with a long-term perspective who shares our own objectives. We both want to see Orion grow to a position of leadership in English-language consumer publishing." He added that he expected the new backing would enable Orion to make a significant expansion of its U.K. market share while enlarging its American presence.

Jean-Louis Lisimachio, chairman and CEO of Hachette Livre, will become Orion's chairman, succeeding Nicholas Barber, who had helped put the deal together. Cheetham and Roche will continue in their positions.

Hachette, a subsidiary of the Lagardere group, has a market share of 20% in France, with annual sales of about $700 million. It sees its Orion stake as a means of expanding into English-language consumer markets.

Orion, formed in 1991 after Cheetham left Random House U.K., acquired Weidenfeld &Nicolson the following year. During its first six years the company enjoyed an annual top-line growth rate of 33%. Sales last year were about $60 million, with operating profits of over $4 million. Orion has such popular authors as Maeve Binchy, Penny Vincenzi and Michael Connelly, and Weidenfeld has more literary authors, including Antonia Fraser, Paul Johnson, Thomas Pakenham and Edna O'Brien. Its fiction imprint, Ph nix House, did such bestsellers as Vikram Seth's A Suitable Boy and Jostein Gaarder's Sophie's World.