Wednesday, June 25, 2014

STOP PRESS - Perseus Imprints to be Sold to Hachette Book Group

Publishers Lunch

The owners of the Perseus Books Group have agreed to a sale of the company, in an unusual three-way transaction, with a formal announcement expected later today following final execution of the documents. Our understanding of the deal based on people familiar with the negotiations is that Hachette Book Group is purchasing PBG, and then in turn will sell to Ingram Content Group Perseus's extensive distribution companies -- including Perseus Distribution, PGW, the recently-formed Legato, and Consortium, plus the Constellation digital distribution platform and their share in the UK joint-venture Faber Factory Powered by Constellation. What HBG retains is Perseus's own, almost entirely nonfiction publishing imprints, comprising Basic, Public Affairs, Running Press, Avalon Travel, Seal Press, academic textbook publisher Westview Press, the Weinstein Books joint-venture and a partnership with Nation Books -- and our understanding is that Hachette intends to take on all of those publishing divisions intact, as well as all of the publishing locations from which those units operate. The deal is expected to close by July 31, pending in part any government review, though no obstacles are currently expected. Final execution of the deal and a formal announcement and confirmations of various details are likely later today. It was not known at press time whether the purchase price will be disclosed immediately or not.

Hachette is expected to run the Perseus imprints through another new, separate division though some portions of the list may be allocated to existing HBG divisions. Perseus ceo David Steinberger, who has run the company since the beginning of 2004, is expected to depart after helping with the transition, as will the other two members of senior PBG management, chief marketing officer Rick Joyce and chief operating officer Charles Gallagher. Perseus Distribution Client Services president Sabrina McCarthy will continue to run that business for Ingram.

The complex transaction has been under exploration and negotiation for over two months, but knowledge of the possible transaction had been limited to small, closely-held teams at the companies involved until earlier today -- meaning that you can expect reaction and comment to filter in after everyone has had a chance to digest the details and hear more from the companies. And there have been a number of incorrect stories floating around the rumor mill today. (PL learned of the negotiations some time ago, confirmed by both sides. Consistent with our policies, we agreed not to report on the transaction -- and potentially derail it -- until it was clear a deal would in fact go through, and until papers are signed there remains the possibility of last-minute issues.)

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