News Corp Buys Harlequin for $415 Million
Posted on May 3, 2014News Corp is investing even more heavily in the book business. It announced that it is buying Harlequin Enterprises from Torstar Corp. Harlequin, which has a very healthy balance sheet, will be a subsidiary of HarperCollins with headquarters remaining in Toronto, Canada.
The acquisition is a key component in News Corp's expansion in the book business, and most particularly in the digital content business. Harlequin has more than 1300 authors under contract and publishes 110 books each month. The international aspect of Harlequin's business is one key reason for the acquisition: almost 40% of Harlequin's revenues come from books published in languages other than English. HarperCollins publishes 99% of its books in English.
Robert Thomson, Chief Executive of News Corp., had this to say about the purchase: "Harlequin is a perfect fit for the new News Corp, vastly expanding our digital platform, extending our reach across borders and languages, and is expected to provide an immediate lift to earnings. Harlequin has a devoted audience around the globe and an empathetic insight into contemporary cultures, which is itself a remarkable resource. This acquisition will broaden the boundaries of both HarperCollins and Harlequin, and is a significant step in our strategy to establish a network of digital properties in the growth regions of the world."
Brian Murray, President and CEO of HarperCollins, focused on the female readership that Harlequin has saying, "Harlequin has built one of the largest and most widely recognized consumer brands in publishing with a highly focused publishing program for women... The Harlequin name and rich heritage will be preserved independently, with the aim to leverage capabilities to bring the book-reading public more choices. Harlequin's business has grown internationally." He also noted that buying Harlequin will give HarperCollins "an immediate foothold in 11 new countries." He says HarperCollins will use that as a base to widely expand foreign readership, with new authors from around the world. This is excellent news for romance authors and translators.
News Corp. paid C$455 million ($415 million U.S.) in cash for Harlequin. Regulatory approval will be required and the shareholders of Torstar's Class A stock must also vote yes on the deal which is expected to close by the end of September.