News Corp. Picks Up Harlequin for $415 MillionBy
Newly single media mogul Rupert Murdoch just got a lot more romance in his life—or, at least, a lot more romance novels.
On Friday morning, Murdoch’s News Corp. announced the company had acquired Harlequin, a Toronto-based publisher of romance novels, for about $415 million. Moving forward, Harlequin will become a division of HarperCollins. It will remain headquartered in Toronto.
In 2013, Harlequin generated $51 million of Ebitda (earnings before interest, taxes, depreciation, and amortization) on $363 million in revenue. For News Corp., it’s the biggest acquisition since Murdoch split his media company in two last year. Why Harlequin?
In a recent interview with Fortune (subscription required), Murdoch touted HarperCollins’s current performance and said he is seeing positive trends in the book market. He is particularly bullish on e-books.
“We were going to make a record profit this year,” said Murdoch. “We find electronic publishing of books very good. People are buying more books. They buy them at lower prices. We still get a good margin, and we don’t have to have huge warehouses and take returns from every bookshop in the world. Our experience with e-books is very good, and we intend to expand it.”
In a press release this morning, News Corp. executives noted that the acquisition would “accelerate the digital evolution of both companies.” Harlequin has proven very successful in the paperless publishing category. The move will also give HarperCollins more international reach. Currently, Harlequin publishes books in 34 languages in more than 100 international markets, and brings in 95 percent of its revenue from outside Canada.
“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,” said Brian Murray, president and chief executive of HarperCollins.
In the meantime, the acquisition should provide Murdoch with plenty of scintillating reading material for his many long, trans-Atlantic flights. A Merger by Marriage by Cat Schield looks particularly promising. From the back of the book: “It takes two tycoons to tango …”