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Hachette's deal to purchase Perseus falls apart

Hachette will not purchase Perseus, as announced in June
Did distribution in the digital age scuttle the deal between Hachette, Ingram and Perseus?

The sale of Perseus, America's sixth-largest publisher, to Hachette, one of publishing's "Big Five," fell through Thursday. The deal would have included sale of its distribution arm to distributor Ingram.

Hachette's planned purchase of Perseus was announced in June. At the time, the acquisition was thought to bolster Hachette's position in its dispute with Amazon. Amazon and Hachette have not been able to come to terms, reportedly over e-book pricing, and Amazon has blocked pre-orders of Hachette books and delayed their shipments. The dispute is ongoing.

Hachette CEO Michael Pietsch dismissed the idea that the Perseus acquisition had anything to do with Amazon. He told the New York Times that it was part of Hachette's "strategic long-term plan to grow in the U.S. market."

Buying Perseus would have expanded Hachette's nonfiction offerings. Industry observers note Hachette's strength is primarily in fiction.

According to trade paper Publishers Weekly, peeling off Perseus' distribution arm troubled the deal. "Until the end of July, Perseus had been working primarily with Hachette. However, talks became more complicated when final discussions with Ingram heated up," PW writes. "Although no one would comment on the particulars, Perseus' unique position in the book world could have made valuing the company difficult, especially the company's distribution arm; there has not been a major sale of a distributor since the beginning of the digital book age."

Perseus' distribution clients include The New Press, Skyhorse Publishing, Columbia University Press, Assouline and ZAGAT.

In an email to staff, Perseus CEO David Steinberger wrote, "The planned transaction involving our company, Hachette and Ingram is not moving forward," reports Publishers Marketplace. "Despite much effort from all three parties, we could not reach agreement on everything necessary to close the transaction."

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Copyright © 2015, Los Angeles Times
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