News Corp has agreed to buy the consumer arm of educational publisher, Houghton Mifflin Harcourt Co., for $349 million, marking the media company’s second deal in less than a week.
The deal adds a portfolio of high-profile novels from authors such as George Orwell, Philip Roth and J.R.R. Tolkien to News Corp’s HarperCollins Publishers division.
The sale would allow Boston-based Houghton to pay down debt and focus on its digital-first strategy in education, goals that the company had set when it put HMH Books & Media on the block last fall.
The deal indicates that New York-based News Corp, which in addition to HarperCollins owns Wall Street Journal publisher Dow Jones & Co. and news organizations in the U.K. and Australia, among other assets, is looking to expand through select acquisitions after a period of slimming down through sales of noncore businesses.
“Timeless writing is a timely source of revenue and the potential to create highly profitable audio and video works flourishes with each passing digital day,” News Corp Chief Executive Robert Thomson said.
News Corp is focusing investments on growth areas including books, digital real estate, and the Dow Jones unit, a person familiar with the situation said.
HarperCollins Chief Executive Brian Murray described Houghton’s catalog of children’s and adult titles as a “crown jewel.” The unit’s children portfolio includes the “Little Blue Truck” and “Curious George” series, and other favorites such as “The Polar Express” and “Jumanji”.
Murray also cited Houghton’s focus on transforming its children’s titles and brands into streaming and interactive-gaming opportunities. “They have a good team and it should help us accelerate our own children’s activities on that front,” he said.
HarperCollins has been a strong performer during the pandemic, which helped propel book sales. In its most recent quarter, the unit posted a 23% growth in revenue to $544 million and 65% jump in profitability to $104 million.
Houghton’s consumer-publishing unit generated revenue of $191.7 million in 2020, accounting for approximately 19% of Houghton’s net sales.
HMH Books & Media also boasts a strong line of cookbooks that includes titles by Jacques Pépin, Mark Bittman and Priya Krishna.
Source: Wall Street Journal