Paramount Global has agreed to sell publishing giant Simon & Schuster to private equity firm KKR for $1.62 billion in an all-cash transaction. Paramount Global President and CEO Bob Bakish said the transaction “delivers excellent value to Paramount shareholders while also positioning Simon & Schuster for its next phase of growth with KKR.” On closing, expected in the first half of 2024, Simon & Schuster will become a standalone private company under the continued leadership of President and CEO Jonathan Karp and COO and CFO Dennis Eulau.

Paramount has been shopping Simon & Schuster since 2020, “both for cost-cutting reasons and to free up its coffers to focus on other areas in its entertainment business,” writes Fast Company, quoting Bakish saying “the proceeds will give Paramount additional financial flexibility” in addition to deleveraging the company’s balance sheet.

Last year, a deal to sell the 99-year-old publisher to Penguin Random House for $2.18 billion was killed by the Department of Justice, which successfully sued to block the sale.

The DOJ raised antitrust concerns, since Penguin Random House is already the country’s largest book publisher and would consolidate more power and market share by absorbing S&S. Penguin Random House was obligated to pay Paramount $200 million as a result of the failed purchase, a termination fee The New York Times says partially offsets the difference in price.

“Since the first deal crumbled, Simon & Schuster has performed well and remained an attractive purchase,” writes NYT, noting that “in the first quarter of 2023, its sales rose to $258 million, up 19 percent from the prior year” while “results at other major publishers, by contrast, were disappointing during that period.”

KKR is “an attractive buyer,” according to NYT, “in part, because it’s unlikely to raise red flags with regulators.”

Paramount announced the deal with its Q2 earnings, which included revenue of $7.62 billion for the April through June period, down 2 percent year-over-year, CNBC reports.

TV advertising revenue fell 10 percent in Q2, when “revenue in the TV business overall dropped 2 percent to $5.16 billion,” per CNBC, which says media companies in general “have been grappling with a soft advertising market, particularly affecting the traditional TV business.”

KKR Chairman of Media Richard Sarnoff said in a press release that the private equity firm, which has more than $700 billion in assets, plans “to help Simon & Schuster become an even stronger partner to literary talent by investing in the expansion of the company’s capabilities and distribution networks.”