U.S. Paperback House Sold to Penguin Books

In the second sale of a major book publisher in a week, Penguin Publishing Co., the largest paperback publishing house in Britain, said Tuesday that it had agreed to buy New American Library, the fourth-largest American publisher of paperback books.

The deal conforms with the industry trend of consolidating hardcover, quality-paperback, and mass market paperback titles in one publishing house, a strategy that among other things gives publishers more clout to attract bankable authors.

New American in particular will bolster Penguin’s presence in the so-called American mass market arena, in which books are sold through magazine distributors at drug stores, airports and other non-traditional outlets.

“We really have a weakness in the United States in mass market distribution,” said John Webster, finance director of Penguin.

Financial terms of the sale, which is expected to be completed in November, were not disclosed.

Last Friday, the West German publishing company Bertelsmann agreed to buy Doubleday & Co., the nation’s second-largest publisher, for more than $500 million. Doubleday’s revenue is roughly four times New American’s.

New American, based in Manhattan, had revenue of more than $100 million in 1985, while Penguin’s American revenue was $50 million, according to Webster. Penguin’s worldwide revenue in 1985 was roughly $160 million.

Penguin will buy the company from New American management and Odyssey Partners, a New York investment group. Odyssey bought the company in 1983 for more than $50 million cash from Times Mirror Co., the Los Angeles media company that publishes the Los Angeles Times. Odyssey, which has holdings in real estate, cable television, railroads, retailing and apparel, said then that it intended to strengthen New American through acquisitions.

One of the rival suitors for New American at the time was Penguin, according to industry sources.

Pearson Holdings

Penguin, which is owned by the British conglomerate Pearson PLC, publishes paperbacks under the Penguin and Puffin imprints and hardbacks under the Viking and Kestrel imprints. The company also owns Hamish Hamilton and Michael Joseph hardback publishers and Sphere Books, a mass market paperback publisher.

New American publishes mass market paperbacks under the Signet, Onyx, Signet Classic and Mentor imprints. The company also publishes hardcover and paperback books under the Dutton, Dial, NAL Books, Plume and Meridian imprints.

Pearson, which had revenue in 1985 of roughly $1.4 billion, owns the Financial Times of London, Westminster Press newspapers in England, a stake in the Economist magazine, a Yorkshire television company, Madame Tussaud’s wax museums, Royal Doulton china, Fairey engineering company and Midhurst oil and oil services company.