Two billion-dollar deals and more consolidation in the book printing segment were highlights of publishing’s merger and acquisition action in 2023. The private equity firm KKR was involved in both big transactions, selling the audiobook publisher RBmedia in mid-September to two other private equity firms for what the Wall Street Journal reported was over $1 billion. Approximately one month later, KKR emerged as the winning bidder for Simon & Schuster, paying $1.62 billion for the nation’s third-largest trade publisher. The price was well below the $2.175 billion Penguin Random House had agreed to pay for S&S in 2021, before that purchase was blocked by the government. But it was still seen as a healthy price—approximately 1.5 times S&S’s annual sales.

While consolidation among book publishers has received lots of attention, consolidation among printers had largely flown under the radar until a few years ago. One of the most active players has been the CJK Group, which made three acquisitions in 2023, including purchases of two of the country’s best-known midsize book manufacturers. In March, CJK acquired McNaughton & Gunn, and in September it bought Worzalla. Both companies became part of CJK’s Sheridan division. In announcing the sale of Worzalla, CEO Jim Fetherston said the deal reflected “market realities.”

In something of a stealth deal, the assets of once-high-flying publisher turned bankruptcy victim Callisto Media were acquired by Sourcebooks for €63 million, in a deal funded by PRH. PRH had acquired a minority stake in Sourcebooks in 2019 and upped its position in 2023 to 53%. PRH also acquired Hay House, one of the leading self-help publishers, last week.

Two independent literary agencies were acquired during the year, as larger firms looked to add expertise to capitalize on the growing demand for content to meet the needs of streaming services.

The majority of the remaining deals involved independent presses buying other indie publishers. Turner Publishing continued its acquisition ways, buying the Bonhomie Press, Conari Press, and Woo! Jr. imprints from Mango Publishing, which had bought those imprints in previous acquisitions of its own. The sale saw the transfer of 589 Mango titles to Turner. Arcadia Publishing has used a host of acquisitions to expand, and that continued this year with its purchase of Applewood Books, which has a backlist of about 2,500 titles, largely built on reissues of original versions of historical books.

Two individuals became owners last year. Chris Capen, who had been president of Southwestern Publishing House, formed Capen Publishing to acquire SPH’s six trade imprints, which have a backlist of about 2,000 titles. Christine Swedowsky, U.S. director of World Editions, acquired the publisher from its previous owner, Libella Publishing Group, in a management buyout. With the completion of the deal, Swedowsky moved the headquarters of the publisher of translated fiction to New York City.

Prospects for 2024

Interviews with publishers and dealmakers suggest that 2024 could be a very active year for acquisitions. While no deals the size of S&S and RBmedia are on the horizon, insiders said they expect to see a large number of smaller acquisitions to take place, citing several factors.

Among them is the state of the U.S. and publishing economies. Inflation has significantly raised costs for publishers, and those higher expenses, along with soft sales, have made it harder for smaller publishers to compete with better-financed rivals.

That combination, one broker said, has led to a plethora of publishers looking to cash out. “There is lots of supply,” he added.

While higher interest rates have temporarily cooled some buyers’ interest, rates are likely to hold steady if not go down in 2024. As a result, insiders believe that the “valuation gap” between buyers and sellers that has existed for much of 2023 will shrink next year, as both sides become more eager to get sales done.

Another factor that could spur more deals, insiders said, is the likelihood that both PRH and S&S, which hasn’t made a big purchase in years, will be active buyers. Following its failure to complete the S&S deal, PRH has focused on a strategy of making smaller, strategic acquisitions along the lines of its purchases of the assets of Callisto and Hay House. Meanwhile KKR has promised to back S&S’s expansion efforts, and when it owned RBmedia, the audiobook publisher made multiple acquisitions.

The completion of the S&S sale in late October is itself seen as a sign that deals could ramp up in 2024, as well, with one dealmaker explaining that buyers and sellers were waiting to see what kind of price S&S would bring in its second time on the market.