Trends in U.S. Trade Book Publisher Mergers and Acquisitions
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Trends in U.S. Trade Book Publisher Mergers and Acquisitions David Lamb1
© Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Mergers and acquisitions (M&A) activity involving book publishers is a continuing feature of the U.S. commercial publishing landscape. Over the last 6 years, from the beginning of 2014 through the end of 2019, there were 120 control transactions involving U.S. trade publishers of all sizes: on average, twenty transactions annually. This activity has proceeded subject to random annual variation uncorrelated to industry performance or to macroeconomic factors; in the last 2 years activity has accelerated, with 27 completed transactions in 2019. Historically, in the wake of the 2008 financial crisis, trade publishing M&A activity stalled from the valuations achieved in 2006–2007, even as activity remained relatively steady. We anticipate that in the wake of the pandemic M&A activity will gradually increase as publishers seek stronger partners and increased scale. In the first 5 months of 2020, eight transactions were announced or completed, and ViacomCBS set the stage for a major transaction by announcing its intention to divest Simon & Schuster. Keywords Mergers and acquisitions · Trade books · Finance · Valuation · Consolidation
Terminology and Dataset The terms “merger” and “acquisition” refer to two legally distinct structures used to achieve a common goal: a business combination. While the term “merger” has a connotation of parity that “acquisition” may lack, there is no inherent implication that a merger is one of equals. Except when analyzing legal structure, the terms are largely interchangeable and will be treated so in this article. The omnibus term “mergers and acquisitions” or “M&A” is somewhat redundant but in common use and will also be used here.
* David Lamb [email protected] 1
Partner, Book Advisors LLC, 232 Madison Avenue, Suite 1400, New York, NY 10016, USA
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Our firm, Book Advisors LLC, uses the term “trade publisher” to refer to publishers of books intended for consumption by consumers, as distinct from specialists or other practitioners (e.g., doctors, scientists, lawyers, accountants). The trade publisher universe, in our construct, includes university presses (rarely participants in M&A activity) and religious publishers (more frequently involved in M&A). It includes children’s books but excludes books primarily used in educational settings. Audiobook publishers are included in transaction counts. In analyzing M&A trends in book publishing, we make use of a proprietary list of U.S. and U.K. trade book publishing transactions compiled by Book Advisors LLC. The transaction list includes financial metrics (purchase price, revenues, and profit) where these are available; this is not often the case, as most transactions are between private parties and financial metrics are undisclosed or subject to non-disclosure agreements. The scale of the enumerated transactions varies in magnitude,
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