News Corp to Buy Houghton Mifflin Harcourt’s Consumer Publishing Arm
News Corp’s Focus on Bolt-On Buys
News Corp (NWSA), the global media company that owns Dow Jones and Fox News, is acquiring the consumer unit of Houghton Mifflin Harcourt, the Boston-based publisher, in a $349 million deal.
The deal is News Corp’s second acquisition in recent days. It underscores the media giant’s newfound interest in making bolt-on buys after a few months of pruning non-core assets.
What This Means for News Corp
By acquiring the consumer unit of Houghton Mifflin Harcourt, News Corp gets its hands on well-known authors, including George Orwell and J.R.R. Tolkien. News Corp also gets access to a front list of lifestyle and children’s titles, including bestsellers Antoni in the Kitchen, Instant Pot Miracle, Wow in the World: The How and the Wow of the Human Body, and Little Blue Truck’s Valentine.
The unit will be run by New Corp’s HarperCollins Publishers unit. For Houghton Mifflin Harcourt, the asset sales enable it to pay down some of its debt. The publisher is also shifting its focus to digital education, which has been a goal since last fall.
Under HarperCollins’ lead, within two years News Corp believes the deal will save it $20 million or more each year, and expects to create revenue synergies in part by expanding the licensing opportunities for the new unit.
News Corp’s Recent Deals
News Corp has been in deal making mode for some time now as it gets rid of non-core underperforming assets and focuses on growth areas. Last week it spent $275 million to acquire Investor’s Business Daily, adding to its portfolio of business and investing-related publications.
Investor’s Business Daily meshes with News Corp’s digital strategy, with the business enjoying red-hot growth in the past few years. According to News Corp, at the time of the acquisition IBD had close to 100,000 digital subscribers and little in the way of overlap with existing Dow Jones subscribers. Investors in the media industry will be eager to watch News Corp’s next moves.
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