Pearson buys leading self-publishing firm

Penguin Books, the famous book publishing arm of Pearson Group, is to beef up its presence in the self-publishing market with the acquisition of Author Solutons.

The Financial Times publisher is paying $116m in cash to prise Author Solutions away from Bertram Capital.

Author Solutions claims to be the world's leading provider of professional self-publishing services, having given around 150,000 authors a route to market.

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"The acquisition gives Penguin a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate," the Pearson statement said.

Penguin will gain access to Author Solutions' expertise in online marketing, consumer analytics, professional services and user-generated content while the US company will benefit from Penguin's design, editorial and sales skills, and its strong international presence.

In 2011 Author Solutions generated revenues of around $100m, and has been growing at an average annual rate of 12% over the past three years. Its business is split broadly evenly across three key areas: publishing, marketing and distribution services, with revenues generated primarily from services to authors.

Pearson will be reflecting the integration costs relating to Author Solutions in its 2012 accounts and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson's weighted average cost of capital from 2013, the first full year of ownership.

Author Solutions will be integrated into Penguin's back office and technology infrastructure but will continue to be run as a separate business.

JH