Pearson buys Author Solutions, will integrate with Penguin

Pearson buys Author Solutions, will integrate with Penguin

Pearson has acquired self-publishing company Author Solutions Inc for $116m (£74m) in cash, with Penguin c.e.o. John Makinson saying "self-publishing has moved into the mainstream of our industry".

Formed in 2007, ASI generated approximately $100m of revenues in 2011, according to a Pearson statement, growing at an average annual rate of 12% over the past three years, with its revenues stemming primarily from services to authors. The company has worked with 150,000 authors to publish, market and distribute 190,000 books, with approximately 1,600 staff located mainly in Bloomington, Indiana and Cebu City, the Philippines.

In a statement, Penguin said the acquisition gives it "a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate".

The statement said ASI's strengths lie in "online marketing, consumer analytics, professional services and user-generated content", with Penguin contributing "design, editorial and sales skills, and its strong international presence", as ASI looks to expand outside the US.

Makinson said: "This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future.”

He also said: "Self-publishing has moved into the mainstream of our industry over the past three years. It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin. No-one has captured this opportunity as successfully as Author Solutions, which has rapidly built a position of world leadership on a platform of outstanding customer support and tailor-made publishing services."

ASI chief executive Kevin Weiss said the company was looking forward to being part of Penguin's "vibrant culture" and said the company "look[s] forward to accelerating the pace of change the industry is experiencing. As part of Penguin, we will be on the front-end of that change and have the broadest set of offerings of any publisher today. That means more opportunity for authors and more choice for readers."

Author Solutions will be integrated into Penguin's infrastructure, but will continue to be run as a separate business. Pearson will be expensing integration costs in 2012, and expects the acquisition to boost adjusted earnings per share and to generate a return on invested capital above Pearson's weighted average cost of capital from 2013.

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