Eighteen months after the collapse of a complicated deal that would have delivered Perseus Books Group’s publishing business to Hachette Book Group and its distribution arm to Ingram Content Group, Perseus signed binding agreements last week to sell those same two businesses to those new owners.
David Steinberger, CEO of Perseus, said there were several factors that contributed to completing the deal this time around. For starters, he said, Perseus has had a solid financial performance since the original deal was called off in August 2014, which has continued to make the company an attractive acquisition target. Indeed, after Perseus announced last fall that it was once again considering a possible sale, many parties expressed interest before Perseus began having serious conversations with about seven companies. Unlike the first attempted sale, this time Perseus hired a financial advisor, Greenhill & Co., to help oversee the process. And unlike the earlier negotiation, when HBG planned to buy all of Perseus and then sell the distribution business to Ingram, the new process involved two separate sales. HBG’s acquisition was announced on March 1, and Ingram’s March 3.
HBG and Ingram had been considered the most likely to get involved with the Perseus purchase this time for the same reason they tried to make a deal in 2014: the acquisition gives the companies more clout in their respective markets. HBG was looking to increase its presence in the nonfiction market when it first bid on Perseus, and it continued to look for ways to expand there following its failure to complete the 2014 deal. Shortly after the Perseus deal collapsed, HBG bought about 1,000 adult nonfiction titles from Hyperion and picked up another 250 nonfiction books in the purchase of Black Dog and Leventhal. The Perseus acquisition adds another 6,000 titles to HBG, about 80% of which are nonfiction.
When the Perseus deal is done, which is expected by the end of March, HBG will make the Perseus publishing group a new division under Susan Weinberg, a long-time Perseus executive who has served most recently as senior v-p and group publisher. Weinberg will join HBG’s executive management board as senior v-p and publisher of Perseus Books, reporting directly to HBG CEO Michael Pietsch.
Perseus comprises nine imprints: Avalon Travel, Basic Books, Basic Civitas, Da Capo Lifelong Books, Da Capo Press, PublicAffairs, Running Press, Seal Press, and Westview Press. The publisher also has partnerships with the Economist, the Nation Institute, Participant Media, and the Weinstein Company.
Noting the last-minute cancellation of the previous attempt to buy Perseus, Pietsch said he was “very happy to be at this point.” He sees the purchase as “a big step in expanding our range and expertise in a wide number of new nonfiction categories.” Pietsch said he has no plans to make major changes in Perseus’s publishing operations. “They have been publishing brilliantly, and we want to help them be even better,” he said. Perseus publishes about 500 new titles annually and had estimated sales of about $100 million.
In about six months, HBG plans to move Perseus’s New York City employees into its own offices in Manhattan. HBG also intends to move the Da Capo Boston staff to HBG’s Boston office. The purchase adds three cities to HBG’s operational map, with Perseus having offices in Philadelphia; Boulder, Colo.; and Berkeley, Calif.
Ingram president Shawn Morin said it is the company’s attention to operate Perseus’s four distribution groups—PGW, Consortium, Perseus Distribution Services, and Legato Publishers Group—alongside its existing Ingram Publisher Services group. The combination of IPS and the Perseus distribution group will handle distribution for more than 600 clients. The Perseus distribution group has client revenue of about $300 million. Phil Ollila, Ingram’s chief content officer, will oversee the combined distribution unit.
The purchase includes Perseus’s Jackson, Tenn., warehouse and its Constellation digital asset management and distribution service, as well as a U.K. office, which will let Ingram expand its footprint there, Morin noted. For Morin, the most exciting aspect of the purchase is that it continues Ingram’s transformation into a service provider for publishers in both physical and digital markets.