Hachette Agrees to Buy Perseus Books

By Dow Jones Business News, 
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Hachette Book Group agreed to buy one of the biggest independent U.S. publishers, Perseus Books Group, beefing up its market share, as it is enmeshed in a bitter dispute with Amazon.com Inc.

Terms of the deal weren't disclosed.

Perseus, owned by private-equity firm Perseus LLC, houses about a dozen imprints, including Basic Books, Da Capo Press and PublicAffairs. The imprints publish in such areas as popular culture, science and history, with such titles as Samantha Power's "A Problem from Hell: America and the Age of Genocide," which won the 2003 Pulitzer Prize for general nonfiction. The publisher, like its private equity owner, was founded by leveraged buyout pioneer Frank Pearl, who died in 2012.

"There have been numerous expressions of interest, and finally there was a level of interest that investors felt was appropriate," said David Steinberger, chief executive of Perseus Books. Mr. Steinberger will leave Perseus Books Group once the sale has closed and subsequently serve as a consultant.

For Hachette, a unit of Lagardere SCA, the deal promises to boost its nonfiction offerings. Hachette is largely known for publishing fiction writers, such as James Patterson, Michael Connelly, and David Baldacci. It would be the second acquisition struck by Hachette in the past year that has beefed up its nonfiction offerings, including its purchase of most of the adult Hyperion imprint from Walt Disney Co.

"Perseus is a very good fit for the publishing we already do," said Michael Pietsch, CEO of the Hachette Book Group. " We've been looking to add more nonfiction. Growth is our primary strategic goal."

Hachette generated about 475 million euros ($646 million) in the U.S. in 2013, according to a recent investor-day presentation that Lagardère made in Paris. In contrast, Perseus produces between $90 million and $100 million in publishing revenue, a person familiar with the firm's finances said.

The deal includes Perseus's client services businesses, through which Perseus distributes books for others, although Hachette will sell that business to Ingram Content Group, a unit of Ingram Industries Inc. Perseus generates about $300 million in distribution sales volume on behalf of more than 400 publisher clients, of which it takes a percentage.

Word of the deal comes as Hachette and Amazon are engaged in a bitter dispute over terms under which Amazon sells Hachette e-books. Amazon, which seeks to improve its cut of e-book prices, has blocked its customers from preordering upcoming Hachette titles and has delayed shipments of some existing titles.

On Tuesday, consumers couldn't preorder a copy of Douglas Preston and Lincoln Child's upcoming novel "The Lost Island," which Hachette's Grand Central Publishing imprint is publishing Aug. 5. By comparison, Barnes & Noble Inc.'s website is accepting preorders on the title, where the hardcover edition is priced at $17.55, a 35% discount, and the digital book is priced at $12.99.

Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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