From the CBC:
Torstar Corp., owner of the Toronto Star and other newspapers, is selling the Harlequin book publishing company for $455 million [$414/USD] to global media company News Corp. and it will be run as a division of HarperCollins Publishers.
Torstar recently reported in its fourth quarter that its book division’s revenue dropped to $95.02 million from $104.99 million in the fourth quarter of 2012, and its operating profit declined to $10.25 million from $14.81 million.
From News Corp:
Harlequin is one of the world’s leading publishers of women’s fiction, with titles issued worldwide in 34 languages and sold in over 100 international markets. The acquisition will extend HarperCollins’ global platform, particularly in Europe and Asia Pacific, helping to fuel its international growth strategy. The deal will complement HarperCollins’ current business by expanding a key content vertical. It will also accelerate the digital evolution of both companies.
Harlequin publishes the work of more than 1,300 authors and releases more than 110 titles monthly. Approximately 40% of Harlequin’s revenues come from books published in languages other than English. Currently, 99% of HarperCollins books are published in English.
The purchase price of the acquisition is C$455 million in cash [$414/USD]. The acquisition is subject to customary closing conditions, including regulatory approvals and approval of Torstar’s Class A shareholders. The closing is anticipated by the end of the third quarter of calendar year 2014. The deal is expected to be accretive to earnings and improve News Corp’s free cash flow.
From The NY Times:
Under Canadian law, foreign companies cannot own Canadian book publishers. But the rules can be waived if the Department of Canadian Heritage determines that the sale will provide a “net benefit” to Canada. HarperCollins is among several foreign publishers that have been able to pass that test in the past.
“Harlequin has been an important part of Torstar over the past 39 years and we are very proud of the global success it has achieved,” said David Holland, President and Chief Executive Officer of Torstar Corporation. “While making the decision to sell has been difficult, we are confident that this transaction represents excellent value for Torstar shareholders and it also further strengthens the financial position of Torstar. This sets the stage for the next chapter in the Harlequin story. HarperCollins is a very well-respected publisher with a tremendous track record of success and will be a good home for Harlequin. The sale will benefit Harlequin in the years ahead by providing the company, its terrific management team and its employees with exciting opportunities to continue to grow.”
“Harlequin has built one of the largest and most widely recognized consumer brands in publishing with a highly focused publishing program for women,” said Brian Murray, President and CEO of HarperCollins. “We are thrilled to welcome Harlequin’s management and staff in Toronto and around the world to the HarperCollins family. The Harlequin name and rich heritage will be preserved independently, with the aim to leverage capabilities to bring the book-reading public more choices. Harlequin’s business has grown internationally, and will give HarperCollins an immediate foothold in 11 new countries from which we can expand into dozens of foreign languages for authors who choose to work with us globally.”
Harlequin was founded in 1949. Torstar acquired a controlling interest in Harlequin in 1975 and acquired the remaining interest in 1981.
Harlequin has more than 1,000 employees worldwide, including more than 350 in Canada.