In what company CEO Jack McKeown said is "unquestionably" Perseus Books Group's largest acquisition to date, the publisher has acquired Philadelphia's Running Press. Although terms of the deal were not announced, Running Press cofounder Buz Teacher has acquired a "significant" interest in Perseus and will serve on Perseus's executive committee as well as on its board of directors.
McKeown described the merger as "a strategic" action that will move Perseus in a new direction. He explained that when Perseus launched in 1997, it viewed quality nonfiction as a niche area that was not being fully exploited by the major houses. But now that Perseus publishes approximately 500 new titles annually and has a backlist of 5,000, McKeown believed that the company had reached a "plateau" and he began looking for new opportunities. Running Press seemed like a good way to diversify because its list is not "redundant" with Perseus's and because of its strength in alternative distribution channels, an area that McKeown sees as a strategic opportunity. According to Teacher, about 54% of Running Press's sales are through alternative outlets while 46% are generated from traditional bookstores.
McKeown said he will "take some time" to decide about the company's distribution strategy. He said Perseus's distribution agreement with HarperCollins "has worked beautifully, and it's something we want to continue." But he added that with the addition of Running Press, the company's scale has increased to the point where it can explore different marketing avenues. Until a final distribution policy is decided, Running Press will continue to handle its own distribution and fulfillment.
Teacher said he viewed the deal with Perseus as a way to remain independent, but also to be "larger in volume and resources." The move gives Running Press access to more capital to help it expand its operation, Teacher noted. He and McKeown agreed that Running Press's first priority is to grow its children's book line, a segment where Perseus had no presence. "You can't be a general book publisher without a children's book program," McKeown told PW. Teacher has already hired one children's book editor and is looking to hire another. Approximately 25% of the 175 titles Running Press publishes annually are children's, and while that number may not move much higher, Teacher wants to continue to improve the quality of the list.
Running Press's total backlist includes nearly 800 titles. Among its biggest hits in recent years were Sisters, Daughters and Mothers and I Feel Great and You Will Too. The company is also known for its Miniature Editions line, which has sold more than 34 million copies.
With the acquisition of Running Press, Perseus's revenues are now estimated to be between $110 million and $125 million. McKeown said that while he is "never averse to new possibilities, for the moment, I think we have enough challenges making sure these companies click."