Deal Making Slowed a Bit in 2017

Although there were no blockbuster acquisitions in 2017 similar to such big 2016 deals as the sale of the Perseus Books Group and the acquisition of Baker & Taylor by Follett Corp., companies still found properties that either added scale to their existing operations or helped move their current businesses in new directions.

Barnes & Noble Education was involved in two large transactions. The purchase of the college wholesaler and retailer MBS Textbook Exchange complemented its traditional college store business, and the purchase of Student Brands, a direct-to-students subscription-based writing skills service, added a new element to B&NE’s offerings.

RBMedia, formerly known as Recorded Books, was another company that made two acquisitions in the year. The first, of Audiobooks.com, added a new distribution outlet to RBMedia and was accompanied by the announcement of the name change. Its second purchase, of Gildan Media, brought the company 2,300 more audiobook titles.

A number of independent publishers were also involved in deals that added scale and, in some cases, diversified their businesses. Among the acquisitions that fell into this category was mind-body-spirit publisher Red Wheel/Weiser’s purchase of Career Press, which added hundreds of business books to Red Wheel’s list, as well as its New Page Books imprint. “This is a major acquisition for us, increasing our publishing program by nearly 50%,” said Michael Kerber, CEO of Red Wheel/Weiser, in a statement at the time of the deal.

In a similar vein, Fox Chapel’s purchase of the books division of Lumina Media involved 330 print titles and 440 e-books, for which Fox Chapel formed a new imprint, CompanionHouse Press.

Trade publishing’s big players were also involved in deal making in 2017. Penguin Random House made one of the year’s more unusual purchases, buying the literary-themed clothes company Out of Print, which creates, among other products, T-shirts featuring famous books. PRH also picked up the well-regarded Sasquatch Books, which had been one of its distribution clients. PRH’s parent company, Bertelsmann, increased its stake in PRH to 75%, with Pearson retaining a 25% share.

Another large media company got involved in the acquisition game: Hearst agreed to buy Rodale in a deal reported to be worth $225 million. The purchase, which is expected to be completed in early 2018, involves both Rodale’s book group and its larger magazine division. Another significant deal that could take place next year is the merger of La Martiniere Groupe, parent company of Abrams, with fellow French publisher Media-Participations. In September, the two said they were in discussions, with a deal likely to come in a few months.

This year’s acquisition activity could have been a bit more busy if buyers and sellers hadn’t disagreed about the value of companies that were up for sale, said David Lamb, partner at Book Advisors, a financial advisory firm for book publishers. “I think the main reason [more deals weren’t done] is divergence between seller and buyer price expectations—we’ve seen this gap on some decent-size deals” that prevented acquisitions from moving forward, Lamb noted.

Book Publishing Acquisitions, 2017