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.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

"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.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.